Economists argue that individuals should continue to consume until total benefit equals total cost

Which of the following statements is correct? a. To control the money supply, the Fed relies primarily on the reserve requirement

b. The discount rate is the rate of interest banks charge to their best customers. c. The Fed changes the reserve requirement frequently. d. Because the Fed has no way to earn income, it is dependent upon Congress for appropriations. e. Banks can turn a borrower's IOU into money.

Inflation affects borrowers and lenders differently. After signing a contract with a fixed nominal interest rate, it can be expected that

a. borrowers will hope that prices fall. b. lenders will hope that prices rise. c. lenders will hope that the purchasing power of money will fall. d. borrowers will hope that prices rise.