Which of the following is not a consequence of a country suffering a high rate of inflation?

A depreciation in its exchange rate compared to currencies from countries with lower inflation rates
A high nominal rate of interest
Impoverishment of households on fixed incomes
Excess aggregate demand for goods and services

Answer(s): D

In a recession, the central bank might adopt a policy of low interest rates. The businesses most likely to benefit from this are those which:

Answer(s): A

If in a boom a government adopted a contractionary (restrictive) monetary policy, a typical business would expect to experience:

Higher interest payments on its bank borrowing.
ii. Falling credit based sales.
iii. Higher income and corporate taxes.
iv. Lower sales to government agencies.
Difficulties in securing working capital vi. Higher prices for imported components.
(i), (ii) and (vi) only
(i), (ii) and (v) only
(ii), (iii) and (iv) only
(i), (iii) and (iv) only

Answer(s): B