John's reservation wage is $10 per hour. This means that
A) John will not supply labor in the market until he receives a wage of at least $10 per hour.
B) John will supply labor in the market at a wage of $10 and lower.
C) John will work 10 hours per day.
D) John will decrease the hours he works when his wage rate exceeds $10 per hour.
A
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When actual inflation is less than expected inflation
A) borrowers lose and lenders gain. B) borrowers gain and lenders lose. C) borrowers and lenders both lose. D) borrowers and lenders both gain.
Equilibrium in the loanable funds market is initially present at a stable price level (zero inflation) and a nominal (and real) interest rate of 4 percent. If a shift to expansionary monetary policy eventually leads to actual and expected inflation of 6 percent,
a. both the nominal and real interest rates will rise to 10 percent. b. the nominal interest rate will rise to 10 percent, but the real interest rate will remain at 4 percent. c. the real interest rate will rise to 10 percent, but the nominal interest rate will remain at 4 percent. d. both the real and nominal interest rates will remain at 4 percent.