Suppose That a Bank Expects Inflation to Be 2% And,accordingly,charges

question 146

Multiple Choice

Suppose that a bank expects inflation to be 2% and,accordingly,charges borrowers an interest rate of 4%.Now suppose that inflation is actually 2%.In this case,inflation

• A) does not affect the distribution of income.
• B) redistributes income from the bank to the bank's borrowers.
• C) redistributes income from the bank's borrowers to the bank.
• D) redistributes income from the bank to the bank's creditors.
• E) redistributes income to the government.

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Definitions:

Mitochondria

Organelles within cells that are responsible for producing energy through the process of oxidative phosphorylation, often called the powerhouse of the cell.

RNA World

Hypothetical early interval when RNA served as genetic material.

Peptide Bonds

Chemical bonds formed between amino acids during protein synthesis, linking the carboxyl group of one amino acid to the amino group of another.

Protocells

Simple, self-organized, prebiotic structures that mimic living cells, thought to be key in the origin of life.