Borrowers benefit and lenders lose when the
A) actual interest rate is less than the expected real interest rate.
B) actual interest rate is greater than the expected real interest rate.
C) actual interest rate is equal to the expected real interest rate.
D) actual inflation rate is less than the expected inflation rate.
A
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Stagflation is the combination of
a. falling output and a falling price level b. falling output and rising unemployment c. falling output and a rising price level d. falling output and falling unemployment e. rising unemployment and a falling price level
When the government fixes its exchange rate
a. it creates an unfavorable balance of trade b. it creates trade surpluses c. it does so to allow the exchange rate to reach equilibrium d. it acts as an arbitrager e. it is not unlike a government policy to control agricultural prices
In a market economy, differences in incomes will
a. reflect the relative scarcity of resources. b. provide individuals with an incentive to supply resources that are valued by others. c. determine the income distribution among market participants. d. do all of the above.
Private solutions may not be possible due to the costs of negotiating and enforcing these solutions. Such costs are called
a. transaction costs. b. corrective costs. c. input costs. d. private costs.