If There Is an Increase in the Expected Inflation Rate

question 196

Multiple Choice

If there is an increase in the expected inflation rate, then,

• A)the supply and demand for loanable funds will decrease.
• B)the supply and demand for loanable funds will increase.
• C)the supply of loanable funds will decrease, and the demand for loanable funds will increase.
• D)the supply of loanable funds will increase, and the demand for loanable funds will decrease.

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Definitions:

Short Run

A period in economics during which some factors of production or inputs are fixed, influencing decisions on production and costs.

Fixed Costs

Costs that do not vary with the level of production or sales and must be paid regardless of the quantity produced or sold.

Farm

An area of land and its buildings, used for growing crops and raising animals.

Production Level

Refers to the amount of goods or services produced by a company or industry over a specific time period.