Keynes assumed that money has ________ rate of return

Using Figure 8.2, a decrease in real output resulting from the profit effect would be depicted as a movement from point

A. A to point C. B. B to point C. C. B to point A. D. C to point B.

A lender need not be penalized by inflation if the

A. short-term rate of inflation is less than the long-term rate of inflation. B. long-term rate of inflation is less than the short-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.