Explain does borrower gain or lose

Assignment Help Business Economics

Reference no: EM137643

Q1. The government is considering a policy to reduce air pollution by restricting the use of "dirty" fuels by factories. In making a decision whether to employ the policy, however if all should likely effects of the policy on real GDP be taken into account? Discribe.

Q2. Assume that a borrower as well as a lender agrees on the nominal interest rate to be paid on a loan. After that inflation turns out to be higher than they both expected.

a. Is the real interest rate on this loan higher or lower than expected?

b. Does the lender gain or lose from this unexpectedly high inflation? Explain does borrower gain or lose?

Reference no: EM137643

Questions Cloud

Consider the impact to be positive or negative : Clarify why you chose this agency as well as what the impacts to you have been. Do you consider the impact to be positive or negative.

Under cost controls rationing is as inefficient : Assuming that under cost controls rationing is as inefficient as possible while under the quota, the allocation is as inefficient as possible.

Household consumption decision : Assume that household consumption decision suddenly become less sensitive to change in the rate of interest.

Ending of company prepayments : The ending of company prepayments balance is expected to be the same as its beginning prepayments balance.

Explain does borrower gain or lose : Does the lender gain or lose from this unexpectedly high inflation. Explain does borrower gain or lose.

Most effective for arranging the main points of a speech : Which organizational pattern would probably be most effective for arranging the main points of a speech with the specific purpose "To inform my audience about the three major kinds of drone aircraft used by the U.S. military".

Rent out to wheat farmers : Assume that you own a 10-acre plot of land that you would like to rent out to wheat farmers.

The anticybersquatting consumer protection act : Compare and contrast the protection to intellectual property provided by trade secrets relative to that provided by patents. What important defense is available to defendants in trade secret cases that are not available to patent infringement defenda..

Two dry cleaners are located on a street of length : Two dry cleaners are located on a street of length. The firms do not make the same profit, verbally describe why this is the case.

User Account

All Pages