A lender need not be penalized by inflation if the:
A. long-term rate of inflation is less than the short-term rate of inflation.
B. short-term rate of inflation is less than the long-term rate of inflation.
C. lender correctly anticipates inflation and increases the nominal interest rate accordingly.
D. inflation is unanticipated by both borrower and lender.
C. lender correctly anticipates inflation and increases the nominal interest rate accordingly.
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Professor Cowen's objection to fiscal policy spending by government is:
A. the government may rush to start stimulus spending and not spend money in the most effective way possible. B. the government may put too much thought into the spending projects and confuse stimulus spending with industrial policy. C. households and businesses might realize that the boost in spending is from the government and simply save the income they receive. D. the government may not have enough money available to do an appropriate amount of spending.
If price is cut and demand is elastic, total revenue will rise because
A) the change in quantity demanded is greater than the percent change in price. B) the percent change in quantity demanded is greater than the change in price. C) the percent change in quantity demanded is greater than the percent change in price. D) customers can't find substitutes.