The Fisher effect and the cost of unexpected inflation Suppose the nominal interest rate on car loans is 11% per year. If borrowers and lenders expect an inflation rate of 2% per year, the expected real interest rate is per year. Suppose the Fed unexpectedly increases the growth rate of the money supply, causing the inflation rate to rise unexpectedly from 2% to 6% per year. In the short run, the real interest rate on car loans will to 5% per year. The unanticipated change in inflation arbitrarily benefits . Now consider the long-run impact of the change in money growth and inflation. According to the Fisher effect, as expectations adjust to the new, higher inflation rate, the nominal interest rate will to 9% per year.

Balance sheet the assets of dallas & associates consist entirely of current assets and net plant and equipment. the firm has total assets of $2 5 million and net plant and equipment equals $2 million. it has notes payable of $150,000, long-term debt of $750,000, and total common equity of $1 5 million. the firm does have accounts payable and accruals on its balance sheet. the firm only finances with debt and common equity, so it has no preferred stock on its balance sheet. a. what is the company's total debt? b. what is the amount of total liabilities and equity that appears on the firm's balance sheet? c. what is the balance of current assets on the firm's balance sheet? d. what is the balance of current liabilities on the firm's balance sheet? e. what is the amount of accounts payable and accruals on its balance sheet? [hint: consider this as a single line item on the firm's balance sheet.] f. what is the firm's net working capital? g. what is the firm's net operating working capital? h. what is the explanation for the difference in your answers to parts f and g?

Any point on a country's production possibilities frontier represents a combination of two goods that an economy:

Under t, the point (0,2) gets mapped to (3,0). t-1 (x, y) →