If future price changes were perfectly anticipated by both borrowers and lenders, then _____
a. the expected real interest rate would be higher than the actual rate
b. the expected real interest rate would lower than the actual rate
c. the real interest rate in the future would decrease by the amount of the price increase
d. the real interest rate in the future would increase by the amount of the price increase
e. the real interest rate in the future would remain unchanged
e
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Which of the following correctly describes the relationship between productivity growth, unemployment, and the economy's production possibilities frontier?
A) An increase in productivity moves the economy from inside the production possibilities set to its frontier. B) An increase in productivity shifts the economy from the production possibilities frontier to a point outside the production possibilities set. C) An increase in unemployment shifts the economy further inside its production possibilities set. D) An increase in unemployment shifts the economy from a point outside the production set back to the production possibilities frontier. E) A reduction in unemployment shifts the entire production possibilities frontier outward.
A basic distinction between the long run and the short run is that
A) if a firm produces no output in the long run, it still incurs a cost. B) the opportunity costs of production are lower in the short run than in the long run. C) in the long run, some inputs are fixed, while in the short run, all inputs are variable. D) in the short run, complete adjustment of all inputs is impossible, while in the long run all inputs can be adjusted.