This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Suppose a representative household holds a bond that is expected to pay a real return of 100 one ... (Read 106 times)

crobinson2013

  • Hero Member
  • *****
  • Posts: 535
on: Jun 30, 2018
Suppose a representative household holds a bond that is expected to pay a real return of 100 one year from now. However, over the next year, the inflation rate rises 15 percent more than was originally anticipated. As a consequence:
 a. the real value of household wealth will increase.
  b. consumption spending will increase, and aggregate demand will rise.
  c. the purchasing power of money will rise.
  d. savings will fall and aggregate expenditures will rise.
  e. the aggregate expenditure in the economy will decrease.

Question 2

A good economic theory:
 a. rests on realistic assumptions.
 b. explains economic behavior and predicts well.
 c. can best be expressed mathematically.
 d. always provides a highly detailed analysis of an economic sector.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

cloud

  • Sr. Member
  • ****
  • Posts: 343
Reply #1 on: Jun 30, 2018
Answer to Question 1

e

Answer to Question 2

b


crobinson2013

  • Hero Member
  • *****
  • Posts: 535
Reply #2 on: Jun 30, 2018
Thank you


cloud

  • Sr. Member
  • ****
  • Posts: 343
Reply #3 on: Jun 30, 2018
No problemo


« previous next »
 

Did you know?

Malaria was not eliminated in the United States until 1951. The term eliminated means that no new cases arise in a country for 3 years.

Did you know?

The strongest synthetic topical retinoid drug available, tazarotene, is used to treat sun-damaged skin, acne, and psoriasis.

Did you know?

Pink eye is a term that refers to conjunctivitis, which is inflammation of the thin, clear membrane (conjunctiva) over the white part of the eye (sclera). It may be triggered by a virus, bacteria, or foreign body in the eye. Antibiotic eye drops alleviate bacterial conjunctivitis, and antihistamine allergy pills or eye drops help control allergic conjunctivitis symptoms.

Did you know?

According to the National Institute of Environmental Health Sciences, lung disease is the third leading killer in the United States, responsible for one in seven deaths. It is the leading cause of death among infants under the age of one year.

Did you know?

An identified risk factor for osteoporosis is the intake of excessive amounts of vitamin A. Dietary intake of approximately double the recommended daily amount of vitamin A, by women, has been shown to reduce bone mineral density and increase the chances for hip fractures compared with women who consumed the recommended daily amount (or less) of vitamin A.

Reversible formation of a disulfide bond by the oxidation of two molecules Reversible formation of a disulfide bond by the oxidation of two molecules
To check pupillary reflexes the nurse first holds the penlight To check pupillary reflexes the nurse first holds the penlight
Catalysis of peptide bond hydrolysis by chymotrypsin (part 2) Catalysis of peptide bond hydrolysis by chymotrypsin (part 2)
Average household size Average household size
Covalent bond Covalent bond
Consider the production function ( ) 0.5 0.5 Y = AK L . Suppose both saving rate (s) and the ... Consider the production function ( ) 0.5 0.5 Y = AK L . Suppose both saving rate (s) and the ...
Video: Prone Position

For a complete list of videos, visit our video library