If the inflation rate turns out to be less than was is expected to be, the clear winners are
A. lenders.
B. borrowers.
C. businesses.
D. people on fixed incomes.
Answer: A
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What would happen to a government's total debt if it ran a budget deficit?
A) Total debt would increase. B) Spending would increase. C) Total debt would decrease. D) Spending would decrease.
The table above shows the payoff matrix for a prisoners' dilemma. In the Nash equilibrium
A) both prisoners get 3 years in jail. B) both prisoners get 2 years in jail. C) both prisoners get 1 year in jail. D) both prisoners get 10 years in jail.
The cost of group health insurance is lower than if an individual buys a policy on his own because
A) moral hazard costs of a group tend to move to a low average. B) insuring a group eliminates the problem of buyers having more information than the seller. C) it is easier for the company to deny claims from a large group. D) the problem of adverse selection is reduced.
Which of the following is a behavioral implication of bounded rationality?
A) unbounded selfishness B) a rule of thumb C) a rational mistake D) a nervous breakdown