Which goods have more elastic demands?
A) goods with many substitutes
B) goods which are necessities
C) goods with few substitutes
D) goods whose purchase represents a small percentage of income
A
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Data on real and nominal interest rates of one-year U.S. T-Bills show that, over the past twenty years,
A) the nominal rate has always been less than the real rate. B) whenever the nominal rate rises, the real rate falls, and vice versa. C) the nominal rate has varied, but the real rate has not. D) the real rate has varied, but the nominal rate has not. E) the real rate has always been less than the nominal rate.
If the rate of inflation in a given time period turns out to be lower than lenders and borrowers anticipated, then the effect will be:
a. a redistribution of wealth from borrowers to lenders. b. a redistribution of wealth from lenders to borrowers. c. a net loss in purchasing power for lenders relative to borrowers. d. a net gain in purchasing power for borrowers relative to lenders.