One cost of unanticipated inflation is:
A. both lenders and borrowers lose.
B. arbitrary redistributions of income.
C. nominal income falls below real income.
D. people cannot repay their debts.
Answer: B
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Long-term interest rates are an example of
A) an intermediate target. B) an operating target. C) a monetary policy objective. D) a monetary policy tool.
Refer to the data below. Which of the following statements about the two nations is correct based on the principle of comparative advantage?
Answer the following question on the basis of the data given for two regions, East and West, of a hypothetical world. The nations have the production possibilities for units of food and clothing given below.
A. East should specialize in the production of food
B. West has a comparative advantage in the production of clothing
C. West has a comparative advantage in the production of food
D. West should specialize in the production of clothing