Who among the following benefits from inflation?
a. Patrick Roy who borrowed $10,000 from a bank to pay the downpayment on a house he bought in Denver
b. The Denver National Bank who provided Patrick Roy with the $10,000 to make the downpayment
c. Jerry Swanson, a landlord who holds a 5-year lease on an apartment rented to students off campus at the University of Arizona
d. Peter Schran who loaned Larry Neal $500 without charging Larry any interest
e. Ian McDonald who is retired and lives on his $700 per week pension
A
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Gasoline taxes are usually used in part to finance the road and highway repair and new construction. Which principle of taxation does this type of tax most fit and why?
What will be an ideal response?
Assuming a market price of $4, fill in the columns in the following table. What is the profit-maximizing level of production? What are the two ways to determine the profit-maximizing level of production?
Quantity Total Revenue (TR) Total Cost (TC) Profit Marginal Revenue (MR) Marginal Cost (MC) 0 3 1 5 2 6 3 9 4 14 5 20 6 28 7 40
Assume you are lending money to a friend for a year and want to earn real interest of 5 percent on the loan. If you believe the inflation rate the next year will be 3 percent, you should charge your friend a nominal interest rate of
a. 5 percent b. 8 percent c. 3 percent d. 15 percent e. whatever he will pay
The central banking system of the United States:
a. Federal Reserve b. National Bank of Washington D.C. c. Dow Jones Stock Exchange d. NASDAQ Exchange