what is the correct Answer:

1-A lender need not be penalized by inflation if the:

A) long-term rate of inflation is less than the short-term rate of inflation
B) short-term rate of inflation
C) lender correctly anticipates inflation and increases the nominal interest rate accordingly
D) inflation is unanticipated by both borrower and lender

______________

2- Unanticipated inflation:

A. reduces the real burden of the public debt to the Federal government
B. hurts borrows and helps lenders
C. hurts people whose sole source of income is from Social Security benefits
D. helps savers

3-the aggregate supply curve:

A. is explained by the interest rate, real-balances, and foreign purchases effects.
B. gets steeper as the economy moves from the top of the curve to the bottom of the curve.
C. shows the various amounts of real output that businesses will produce at each price level.
D. is downsloping because real purchasing power increases as the price level falls.

AS3 AS AS2 JI 0 Real Domestic Output, GDP

in the above diagram a shift from as2 to as3 might be caused by a(n):

A- decrease in interest rates.
B- increase in business taxes and costly government regulation.
C- decrease in the prices of domestic resources.
D- decrease in the price level.

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Assume the MPC is 2/3. If investment spending increases by $2 billion, the level of GDP will increase by:

A- $3 billion

B- $2/3 billion

C- $6 billion

D- $2 billion

The interest rate will be controlled and changed in response to the expected inflation rate. This will aid in avoiding the enormous risk and loss caused by higher inflation in the economy. The rising interest rate will exert control over the investment rate, and thus the central bank attempted to exert control over the money supply as well. As a result, the money supply will be managed and interest rates in the economy will rise.

As a result, the lender will make a proper profit rather than a loss due to inflation. If the lender does not act in accordance with his or her anticipated needs, the lender should repay money that has less purchasing power than the money they received as a loan.

Neither the borrower nor the lender was surprised by the inflation rate. Long-term and short-term inflation were both equated. Long-term inflation will prevail in the economy for a long time.

2. Unexpected inflation reduces the federal government's real burden of the national debt.

Unanticipated inflation occurs when people are unaware that inflation is on the way until the general price level rises. Unexpected inflation would arbitrarily "tax" fixed-income households.

3. The aggregate supply curve depicts how much real output businesses will produce at each price level.

The total value of goods or services in a market, sector, or economy is referred to as aggregate supply. The term aggregate supply refers to the number of goods that can be produced at various price levels in a given time period, which is usually one year.

4. A decrease in the prices of domestic resources could cause a shift from AS₂ to AS₃.

When the price of domestic resources falls, the supply of available land expands, causing the AS curve to shift to the right.

A shift to the left in AS indicates a decrease in aggregate supply, which can be caused by an increase in taxes and regulations, an increase in input prices, or any other change that reduces the availability of resources.

5. If investment spending is increased by $2 billion, GDP will rise by $6 billion.

If the MPC is 2/3, the multiplier is 3, so if investment spending increases by $2 billion, GDP will increase threefold, or $6 million.

We already know that Y = C(Y-T) + I + G + X - M.

We get by completely differentiating the above equation,

dY equals c'dY + dI, dT equals dG equals dX equals dM equals 0

Alternatively, dY/dI = 1/(1-c')

dI = 2, c' = 0.75,

dY = 4 x 2 = 6 billion

To learn more about Inflation, please refer:

https://brainly.com/question/29308595

To learn more about aggregate supply, please refer:

https://brainly.com/question/29349235

To learn more about domestic resources, please refer:

https://brainly.com/question/14378065

To learn more about investment spending, please refer:

https://brainly.com/question/29766778

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