If you anticipate that the inflation rate is going to rise from 2 percent to 3 percent next year, you should
A. wait to buy a house until next year.
B. keep your funds in your sock drawer.
C. borrow funds at a fixed rate of interest.
D. save your funds at a fixed rate of interest.
Answer: C
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A supply curve is also a maximum-supply-price curve
Indicate whether the statement is true or false
The above figure shows the demand and cost curves facing a monopoly. A $100 per unit tax would raise price by
A) $100. B) $50. C) $25. D) $0.
Which of the following is the outcome of the lemons problem in the used-car market?
A) Only low-quality cars will be traded in the market. B) Only high-quality cars will be traded in the market. C) Both low-quality and high-quality cars will be traded in the market. D) No cars will be traded in the market.
Asymmetric information often makes it difficult to tell good from bad. This is a problem of
A) moral hazard. B) negative externalities. C) adverse selection. D) moral hazard and not adverse selection.