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All main topics / Business Economics / History of Economics / ECON 2200 Exam 1
94
Would "Reflation" actually have helped borrowers?  Would it help to increase the price of farm products?
Yes...in the short term.  Increasing the amount of money in the market is good for borrowers that are mid-loan because they will have less money-value to pay back.  But when their loan was over and they got a new one, the lenders would compensate by increasing the rate of the new loan. 

Yes, but the price of farm products will rise more slowly than the price of everything else, which would still result in adverse terms of trade for farmers. 
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Flashcard info:
Author: savhighsmith
Main topic: Business Economics
Topic: History of Economics
School / Univ.: UGA
City: Athens
Published: 15.09.2010

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