If inflation is both high and volatile:
A. nominal interest rates will also be high and volatile since real interest rates are stable.
B. lenders may be unwilling to lend out of fear of unexpected increases in inflation.
C. real interest rates will also be high and volatile since nominal interest rates are stable.
D. borrowers may be unwilling to borrow out of fear of unexpected increases in inflation.
Answer: B. lenders may be unwilling to lend out of fear of unexpected increases in inflation.
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"Crowding out" investment in supply side economics refers to a situation in which groups of investors compete with each other, thereby driving up interest rates
Indicate whether the statement is true or false
When the current price of a good is below the equilibrium price:
A. sellers will notice their inventories are growing. B. there will be excess supply. C. the price will tend to stay below the equilibrium price. D. buyers have an incentive to offer to pay sellers more than the current price.