According to the intertemporal substitution effect, when the price level rises and other things remain the same
A) the interest rate falls.
B) the interest rate rises.
C) the quantity of money increases.
D) government taxes rise.
B
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How did Operation Twist affect the monetary base?
A) reduced B) increased C) no change D) indeterminate
Icy Treats is a large Italian ice dessert chain with franchises located throughout the United States. Icy Treats' advertising will likely focus on which of the following?
A) promoting Icy Treats locations in a specific state B) promoting a struggling Icy Treats location in Memphis, Tennessee C) promoting a successful Icy Treats location in Memphis, Tennessee D) promoting the enjoyment of eating Icy Treats' icees
When persistent inflation is present, we would expect
a. borrowers to systematically gain at the expense of lenders. b. lenders to systematically gain at the expense of borrowers. c. nominal interest rates to be higher than would be true if prices were stable. d. nominal interest rates to be lower than real interest rates.
If the interest rate is 4 percent per year and you borrow $100 for one year, at the end of the year you must pay back
A. $100. B. $104. C. $96. D. $4.