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Amount of unemployment caused by price change

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Reference no: EM131916573

a) How a lender can lose from inflation if the inflation is unanticipated and the loan is a fixed-interest-rate loan. How would a variable-interest-rate loan (one that adjusts over the contract period) eliminate these losses?

b) How would an increase in the world price of oil affect the amount of search unemployment? Is this unemployment undesirable? What public policies might affect the amount of unemployment caused by this price change?

Reference no: EM131916573

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