Rachel agrees to lend Phoebe $100 for six months and charges her interest of 2 percent. At the end of the six-month period, prices have risen by 4 percent
a. Purchasing power has been redistributed to Rachel.
b. No purchasing power has been redistributed.
c. Purchasing power has been redistributed to Phoebe.
d. Both Rachel and Phoebe received extra purchasing power.
c
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Market clearing means
A) quantity demanded exceeds quantity supplied. B) quantity demanded equals quantity supplied. C) quantity demanded is less than quantity supplied. D) quantity demanded and quantity supplied both equal zero.
Most economists support the idea of peak-load pricing on the grounds of
A. fairness in income distribution. B. efficiency in input usage. C. equality of opportunity. D. efficiency in output allocation.
What is a problem with anti-trust laws involving restrictive practices?
a. The practices are not always illegal. b. So many firms engage in the practices, it is hard to prosecute all the firms. c. The practices do not cause prices to increase in all cases. d. What practices are illegal is clearly understood.
In the rational expectations theory, a temporary change in real output could result from:
A. Anticipated price-level changes B. A price-level surprise C. A coordination failure D. Insider-outsider relationships