Unanticipated inflation generally hurts borrowers and benefits lenders
a. True
b. False
Indicate whether the statement is true or false
False
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The United States
A. has sometimes attained productive efficiency. B. usually attains productive efficiency. C. never attained productive efficiency.
If a commercial bank borrows from the Federal Reserve, the price it pays is
A) zero, there is no payment. B) the prime rate. C) the federal funds rate. D) the discount rate.
If the real interest rate is -1.4% and the nominal interest rate is 0.6%, expected inflation equals
A) -2% B) -0.8% C) 0.8% D) 2%
The crowding-out effect refers to the tendency of
a. the additional borrowing accompanying larger budget deficits to increase interest rates and reduce private spending. b. higher future taxes accompanying budget deficits to reduce private consumption. c. the inflation rate to rise when the unemployment rate is low. d. increases in private savings to reduce interest rates and, thereby, crowd-out government expenditures.