If the inflation rate turns out to be greater than was is expected to be, the clear losers are
A. businesses.
B. people on incomes adjusted by a COLA.
C. borrowers.
D. lenders.
Answer: C
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Consider the effect of business cycles on bondholders versus stockholders. We expect that business cycles will affect:
A. stockholders more since they are residual claimants. B. bondholders more since the amount they receive depends on profits. C. bondholders and stockholders about the same. D. bondholders more since they do not have any claim to property.
Which of the following was NOT a key feature of the Affordable Care Act, signed by President Obama in 2010?
A. A requirement that almost everyone have health insurance or pay a fine B. Tax credits and subsidies to help low-income families buy health insurance C. A rule preventing insurers from denying coverage because of preexisting conditions D. Panels of government doctors to review and approve major health care purchases
Use the dynamic aggregate demand and aggregate supply model and start with Year 1 in a long-run macroeconomic equilibrium. For Year 2, graph aggregate demand, long-run aggregate supply, and short-run aggregate supply such that the condition of the
economy will induce the president and Congress to conduct contractionary fiscal policy. Briefly explain the condition of the economy and what the president and Congress are attempting to do. What will be an ideal response?
If demand falls and supply falls, equilibrium price will _____ and equilibrium quantity will _____.
Fill in the blank(s) with the appropriate word(s).