Anticipation of inflation encourages
a. |
retiring debt. |
|
b. |
saving. |
|
c. |
borrowing. |
|
d. |
lending. |
Anticipation of inflation encourages borrowing.
Also anticipation of inflation disourages saving.
Therefore, option c is the correct answer.
Anticipation of inflation encourages a. retiring debt. b. saving. c. borrowing. d. lending.
9. Leverage (i.e., the presence of lending and borrowing opportunities) a) can make no difference in the level of social welfare. b) can improve social welfare. c) can increase only profits, not social welfare. d) results in a lower level of total utility 10. The irrelevance proposition states that the value of a firm a) depends on the relative proportion of debt and equity of the firm. b) depends only on the value of shareholders equity c) depends only on...
7. A bank, whose lending rate is equal to its borrowing rate, generates a) a spread equal to the borrowing and lending rates. b) a positive spread c) a zero spread d) a negative spread 8. A higher risk of insolvency is indicated by a) a higher value of capital ratio and a smaller value of leverage ratio. b) a smaller value of capital ratio and a smaller value of leverage ratio. c) a smaller value of capital ratio and...
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The supply of loanable funds is equivalent to: A. national saving. B. private saving. C. public saving. D. investment.
1) If the substitution effect of the real interest rate on saving is smaller than the income effect of the real interest rate on saving, then a rise in the real interest rate leads to a in consumption and a_ _in saving, for someone who's a lender (saver). A) fall; fall B) fall; rise C) rise; fall D) rise, rise 2) For a borrower, an increase in the real interest rate will lead to A) higher current consumption and less...
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