If inflation is correctly anticipated, those who buy government bonds will:
A) suffer losses regardless of inflation because interest paid on government bonds is set by Congress.
B) not suffer losses because inflation does not affect the purchasing power.
C) suffer losses because they will be compensated by lower interest payments.
D) not suffer losses because they will be compensated by higher interest payments.
Correct Answer:
Verified
Q56: Suppose that the economy has a structural
Q57: The nominal deficit depends primarily on:
A)government's expenditures
Q58: Suppose potential income is $60 billion, actual
Q59: Suppose that the economy has a structural
Q60: The cyclical surplus is $450 billion, potential
Q62: Holding the nominal deficit, nominal interest rate,
Q63: If the nominal deficit is $300 billion,
Q64: If the U.S. inflation rate increases unexpectedly
Q65: An unanticipated increase in the inflation rate
Q66: All other things equal, the real surplus:
A)falls
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