Under which one of the following situations would you be better off?
A) You have $10,000 in your savings account paying 5 percent per year and unanticipated inflation is 8 percent per year.
B) You have paid $500 for a $1,000 U.S. savings bond that matures in 10 years and unanticipated inflation is 10 percent per year.
C) You lend a friend $1,000 at 6 percent to be repaid in one year and unanticipated inflation is 7 percent during the year.
D) You borrowed $2,500 at 7 percent to pay for this year's college expenses and unanticipated inflation is 12 percent during the year.
Answer: D
You might also like to view...
The price at which a good or service is traded on international markets is called the ________ price.
A. world B. market C. universal D. international
Your economics professor offers 10 points extra credit if you attend a review session before your next exam. This extra credit is an example of
A) an increase in marginal cost to attend the review session. B) a decrease in marginal benefit to attend the review session. C) a rational choice. D) an incentive to attend the review session. E) None of the above answers is correct.
The federal government of the United States was established as a federation of the governments of the original thirteen states
a. True b. False
If the equilibrium price of bread is $2 and the government imposes a $1.50 price ceiling on the price of bread, then:
a. more bread will be produced. b. there will be a shortage of bread. c. the demand for bread will decrease. d. producers will charge $0.50 for bread. e. $0.50 in tax revenue will be paid for each unit of bread.