If Inflation Is Positive and Is Perfectly Anticipated

question 77

Multiple Choice

If inflation is positive and is perfectly anticipated

• A)those that borrow money lose.
• B)those that lend money lose.
• C)those that hold paper money lose.
• D)no one in the economy loses.

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Definitions:

Net Present Value

The calculation used to determine the current worth of a future stream of cash flows, adjusted for the time value of money.

Depreciation Tax Shield

The reduction in income taxes that results from taking a deduction for depreciation on the company's tax return, effectively reducing taxable income.

Cash Outlays

Payments in cash for expenses or investments made by a business or individual.

Auto Leases

Contracts that allow a person to use a car for a set period of time in exchange for regular payments, without owning the vehicle.