With no inflation, a bank would be willing to lend a small business firm $5 million at an annual interest rate of 3 percent. But, if the rate of inflation was anticipated to be 4 percent, the bank would charge the firm an annual interest rate of:

Consider the following simplified sequence of exchanges. A farmer sells wheat to a miller, for 25 cents. The miller grinds the wheat into flour, and sells that to a baker, for 35 cents

The baker turns the flour into a loaf of bread, which she sells to a grocer for 60 cents. The grocer then sells you the loaf of bread for 85 cents. What can we conclude? A) Your purchase of the bread avoided the use of a middleman. B) The grocer's profit means you lost on the deal. C) GDP increases by 25 cents. D) GDP increases by 85 cents. E) GDP increases by $2.05.

People who can earn higher market wages

a. have a greater net utility associated with nonmarket work b. supply more hours to market work than people with lower wages c. are less likely to perform nonmarket work d. are more likely to view leisure as an inferior good e. experience less disutility associated with market work