The slope of the LM curve will be flatter the __________ is the income-sensitivity of the demand for money and the __________ is the interest-sensitivity of the demand for money

During a recession, the supply of bonds ________ and the supply curve shifts to the ________, everything else held constant

A) increases; left B) increases; right C) decreases; left D) decreases; right

Assume that for a given year, the nominal interest rate is 9 percent while inflation rises to 11 percent indicating a 4 percent higher rate than anticipated. Which group of people is made better off by the inflation?

a. Those who lend at fixed interest rates b. Those who borrow at fixed interest rates c. Those who borrow at variable interest rates d. Those who receive fixed incomes e. Those who save at variable interest rates