People who took out mortgages at the height of U.S. inflation in 1981:
A. paid much higher real interest rates than expected since inflation fell dramatically after 1981.
B. paid much lower real interest rates than expected since inflation fell dramatically after 1981.
C. paid much higher real interest rates than expected since inflation rose dramatically after 1981.
D. paid much lower real interest rates than expected since inflation rose dramatically after 1981.
Ans: A. paid much higher real interest rates than expected since inflation fell dramatically after 1981.
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To maximize profits, the discriminating monopolist sells abroad rather than selling additional units at home because:
a. the home market is just too competitive. b. there would be more incentive for entry from other firms. c. the market price at home would rise and the firm would lose customers. d. it would lower total profits if it lowered its home price in order to sell the additional units.
In the United States during the 1970s, the unemployment rate rose from previous years, and the inflation rate increased rapidly. This set of events is best described by saying that the
A) the long-run Phillips curve shifted leftward. B) short-run Phillips curve shifted downward. C) economy moved to a lower point on its short-run Phillips curve but the short-run Phillips curve did not shift. D) short-run Phillips curve shifted upward. E) economy moved to a higher point on its short-run Phillips curve but the short-run Phillips curve did not shift.