When people invest, they face a trade-off between which of the following?
a. a higher risk and higher return or a lower risk and lower return
b. a higher risk and lower return or a lower risk and high return
c. a higher risk and no change in the rate of return
d. the price and the interest rate
a. a higher risk and higher return or a lower risk and lower return
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Explain what rent seeking is and how it may reduce the benefits of industrial policies
What will be an ideal response?
Suppose that monetary neutrality and the Fisher effect both hold and the money supply growth rate has been the same for a long time. Other things the same a higher money supply growth would be associated with
a. both higher inflation and higher nominal interest rates. b. a higher inflation rate, but not higher nominal interest rates. c. a higher nominal interest rate, but not higher inflation. d. neither a higher inflation rate nor a higher nominal interest rate.