The tendency for people to enter into agreements in which they can use their private information to their own advantage and to the disadvantage of the less informed party is known as

The real interest rate differs from the nominal rate in that ________

A) it more accurately represents the true cost of borrowing B) it varies negatively with changes in the rate of inflation C) it is the better indicator of credit market conditions D) all of the above E) none of the above

A central bank sets out to reduce unemployment by changing the money supply growth rate. The long-run Phillips curve shows that in comparison to their original rates, this policy will eventually lead to

a. an increase in both the inflation rate and the unemployment rate. b. an increase in the inflation rate and a reduction in the unemployment rate. c. no change in either the inflation rate or the unemployment rate. d. an increase in the inflation rate and no change in the unemployment rate.