Heavy Use of Long-Term Debt May Be Beneficial in an Inflationary

question 48

Multiple Choice

Heavy use of long-term debt may be beneficial in an inflationary economy because

• A) the debt may be repaid in more "expensive" dollars.
• B) nominal interest rates exceed real interest rates.
• C) inflation is associated with the peak of a business cycle.
• D) the debt may be repaid in "cheaper" dollars.

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Definitions:

Numbered Cards

Cards sequentially labeled to organize information, facilitate easy retrieval, or guide an ordered presentation or process.

Nonlinear

Not proceeding in a straight line or sequential order, often referring to narratives or processes that jump around in time or topic.

Storytelling

The art of conveying messages, stories, or narratives through verbal or written form to entertain, educate, or convey morals.

Direct

A straightforward or explicit way of communication or action without any intermediary steps.