Which of the Following Is Likely to Be an Effect

question 51

Multiple Choice

Which of the following is likely to be an effect of inflation?

• A) an increase in the willingness of lenders to lend money for longer periods
• B) a decrease in the willingness of borrowers to borrow money for longer periods
• C) a decrease in the purchasing power of lenders in an economy
• D) an increase in the willingness of people to buy bonds as a hedge against rising prices
• E) an increase in the willingness of people to buy physical assets as a hedge against rising prices

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Definitions:

Invisible Hand

A metaphor introduced by economist Adam Smith to describe the self-regulating behavior of the marketplace, where individuals acting in their own self-interest inadvertently benefit society at large.

Petty Bourgeoisie

Class of small business owners and employees who own some means of production but do not exploit large labor forces, often seen as part of the middle class.

Middle Class

A social group between the upper and working classes, including professionals, business people, and others with a moderate to high standard of living.

Post-1789

The period following the year 1789, significant for marking the beginning of the French Revolution and the subsequent changes in European political and social structures.