Monopolies and oligopolies both erect barriers to entry through the use of

Which of the following most accurately describes what occurs during a time of inflation?

A) People must work longer to live as well. B) Prices rise faster than incomes. C) The average standard of living declines. D) The cost of living increases. E) The purchasing power of money falls.

If a financial institution extends a 25 year loan at a 6 percent interest rate, and then the inflation rate increases suddenly and unexpectedly to 6 percent per year, the institution receives on its loan a real return of

A) minus 12 percent. B) zero percent. C) 6 percent. D) 12 percent. E) 36 percent.