If Inflation Is Much Higher Than Originally Anticipated,_____ Are Better

question 135

Multiple Choice

If inflation is much higher than originally anticipated,_____ are better off and _____ are worse off.

• A)lenders who extended loans at fixed interest rates;people who borrowed at fixed interest rates
• B)people who borrowed at fixed interest rates;banks that extended loans at fixed interest rates
• C)retired people living on a fixed income;people who had borrowed fixed interest rate loans
• D)people who deposited their savings at fixed interest rates;banks that accepted deposits at fixed interest rates
• E)oil refiners who signed labor contracts agreeing to pay their workers the cost-of-living wage;workers who receive that cost-of-living wage

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Definitions:

Terms Of Trade

The ratio of a country's export prices to its import prices, affecting the volume of goods a country can import for a given level of exports.

Exchange Rate

The value of one currency expressed in terms of another, determining how much of one currency can be exchanged for another.

Leading Import

The most significant or highest-valued good or service that a country imports from another country.

Comparative Advantage

The ability of an entity to produce a good at a lower opportunity cost than another entity, leading to potential gains from trade.