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ale4655 [162]
3 years ago
9

Given a fixed nominal interest rate on a loan, unanticipated deflation:

Business
1 answer:
jolli1 [7]3 years ago
6 0

Deflation means that your money has more buying power, thus it decreases the burden of paying off your loan because (in theory) you would have more money available to pay your loan since other prices have gone down.

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7 0
3 years ago
After decreasing Nominal & Real GDP, the Federal Reserve will_______.
FinnZ [79.3K]
<span>After decreasing Nominal & Real GDP, the Federal Reserve will engage in Contractionary Monetary Policy. The answer is letter B. IF the Federal Reserve increases the amount of monetary growth, the economic theory shows that it will decrease in the short run but will increase eventually in the long run from their initial value.</span>
4 0
4 years ago
Which explains the increase in the price of an item from $10 in 1980 to over $25 today?
Vikentia [17]
Inflation.
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7 0
3 years ago
What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount
klio [65]

Answer: D. The equilibrium quantity would increase, and the effect on equilibrium price would be ambiguous.

Explanation: It follows that the quantity of latte produced would increase given that the newly introduced machine reduces the amount labour required and also is more efficient. Therefore more quantities of latter will be produced in short periods. Same thing would occur when it is discovered that the coffee used in producing lattes prevent heart attacks.

In both instances, the equilibrium quantity increases. However, equilibrium price is ambiguous, this is because the discovery that coffee prevents heart attacks would serve to push up prices of latte since suppliers would want to cash in on that, while the use of machines would push price down as a result of mass production.

6 0
3 years ago
Urban planner: When a city loses population due to migration, property taxes in that city tend to rise. This is because there ar
sineoko [7]

Answer: the correct answer is (A) If Stonebridge does not raise taxes on its residents to maintain its infrastructure, the city will become much less attractive to live in as that infrastructure decays.

Explanation:

Situation: When a city loses population due to migration, fewer residents remain to pay to maintain the city's infrastructure, so property taxes tend to rise. These property taxes drive even more residents away. The city of Stonebridge is starting to lose population, so Stonebridge should not raise property taxes.

Reasoning: What would weaken the idea that the city should refrain from raising property taxes? That the city would decay because it wouldn't have money to maintain the infrastructure so A is correct.

3 0
3 years ago
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