The largest liability on the balance sheet of most banks is its
A) holdings of securities.
B) loans.
C) checking account and savings account deposits of its customers.
D) deposits with the Federal Reserve.
E) vault cash.
C
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In what sense do self-fulfilling expectations determine the acceptability of a medium of exchange?
A) People like to do what the government expects them to do. B) People value something as money only if they believe others will accept it from them as payment. C) People expect that money will never lose its value. D) People expect that eventually every country will use the same medium of exchange.
Milton Friedman and Edmund Phelps ______ the Phillips curve in the 1960s.
a. eliminated b. promoted c. invented d. criticized
In the data, we observe that countries with high inflation rates tend to have high nominal interest rates. What does this imply, if anything, about real interest rates in countries with very high inflation rates?
What will be an ideal response?
Which of the following is NOT an assumption of the classical system?
A. There is no money illusion. B. People are motivated by self interest. C. Pure competition exists. D. Wages and prices are inflexible.