Which of the following individuals is not hurt by inflation?
A. Akshay, who borrowed $1,000 from a friend and agreed to pay the same amount one year later, but during the year, prices increased by 10 percent.
B. Vjiay, who lent his friend $1,000 and agreed to accept repayment of the same amount one year later, but during the year, prices increased by 10 percent.
C. Randall, who lives on a fixed income of $800 per month.
D. Asuza, who keeps her savings in the form of cash in a safe at home.
Ans: A. Akshay, who borrowed $1,000 from a friend and agreed to pay the same amount one year later, but during the year, prices increased by 10 percent.
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The rate of interest charged by the Federal Reserve to member banks for reserves borrowed from the Fed is known as the:
a. repurchase rate. b. discount rate. c. Q-ceiling rate. d. federal funds rate.
Monopolistic competitive firms are productively inefficient because production occurs where:
A. Price is greater than marginal revenue B. Marginal cost is less than price C. Marginal cost is not at its lowest D. Average total cost is not at its lowest