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Firlakuza [10]
3 years ago
15

If the inflation rate unexpectedly rises:_______.a. borrowers gain at the expense of lenders.b. lenders will gain at the expense

of borrowers.c. the real interest rate will exceed the nominal interest rate.d. there is no reason to expect that the inflation will help borrowers relative to lenders.
Business
2 answers:
Alborosie3 years ago
7 0

Answer:

a. borrowers gain at the expense of lenders

Explanation:

Inflation refers to the sustained increase of the price of a commodity over a period of time.

It can be caused due to increase in production cost or increased demand of a good or service.

The losers during inflation are the creditors because the money loaned out had more value or purchasing power compared to what is repaid. This is due to the fact the borrower will still owe the lender the same amount .

Scilla [17]3 years ago
3 0

Answer:

A) borrowers gain at the expense of lenders.

Explanation:

The real interest rate that lenders earn = nominal interest rate - inflation rate. If the inflation rate increases, the real interest rate earned decreases.

The real interest rate that borrowers pay is also = nominal interest rate - inflation rate. If the inflation rate increases, the real interest rate paid decreases.

So, any increase in the inflation rate favors borrowers and hurts lenders.

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Kertis, Inc. reported Net fixed assets as follows on its Balance sheets for December 31, 2011 and December 31, 2012: 2011 2012 N
Tems11 [23]

Answer:

Accumulated depreciation in 2012 is $132,314

Explanation:

                                    2011                 2012

Net fixed assets       $200,000       $250,000

Depreciation expense = $23,000

Accumulated depreciation in 2011 = $109,314

Depreciation in 2012 = $23,000

Accumulated depreciation in 2012 = $109,314 + $23,000

= $132,314

4 0
3 years ago
A beekeeper lives adjacent to an apple orchard. The orchard owner benefits from the bees because each hive pollinates about one
maks197457 [2]

Answer:

The beekeeper will maintain hives where marginal cost equals marginal revenue.

So,

15 + 5q = 40

5q = 25

q = 25/5

q = 5 hives.

Explanation:

3 0
3 years ago
Which of the following policies is most likely to encourage innovation, higher quality goods, and lower prices?
nasty-shy [4]

Answer:

The correct answer is c. Reducing barriers that limit entry of firms into new and existing markets.

Explanation:

An entry barrier is a high cost or other type of barrier that prevents a business from entering the market and competing with other businesses. Barriers to entry may include government regulations, the need for a license, or having to compete with a large corporation being a small business.

As an example, the large company is able to produce a larger quantity of products more efficiently than a company with fewer resources. They have lower costs because they are able to buy bulk materials, and they have less overhead because they produce more under one roof. It would be difficult for the small company to keep up with that, resulting in the avoidance of market entry.

Barriers to entry can have a negative effect on prices because the playing field is not level and competition is restricted. It is not an ideal situation for anyone except for the large company that has a monopoly. However, entry barriers are not always prohibitive. In fact, many new businesses find some type of entry barrier that they must overcome, be it the initial investment, the acquisition of licenses or obtaining a patent - it is only part of the business.

5 0
3 years ago
The amount the bank charges for use of money is called interest. <br> True <br> False
klemol [59]
True. When you borrow from a bank, you pay back the amount loaned PLUS interest.
3 0
3 years ago
What should a consumer consider when deciding whether to purchase health insurance?
sashaice [31]
C. Whether the deductible is higher compared to other policies. Sorry if I am wrong but this is my best answer.
7 0
2 years ago
Read 2 more answers
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