Management of expectations by a central bank is based on the view that ________
A) decreasing the federal funds rate will lead to a reduction in the discount rate
B) if economic agents believe that the price of an individual asset will rise in the future, they will buy that asset today, contributing to its eventual price increase
C) if households expect an increase in prices in the future, they will engage in spending today
D) households will increase their spending today if they believe that the monetary authorities are committed to maintaining low interest rates
D
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According to the textbook, Monetary policymaking is most accurately described as:
A. both an art and a science B. superior to other policies, since it is conducted by economists. C. a science due to detailed models used D. an art as human judgments are necessary
Stagflation means a
A) high rate of inflation coupled with a high rate of unemployment. B) high rate of inflation coupled with a very low rate of unemployment. C) low rate of inflation coupled with a very high rate of unemployment. D) low rate of inflation coupled with a rate of unemployment below the natural rate.
If the complicated technology costs $10million to develop while the simple technology costs $2million to develop, which technology is more profitable to develop?
a. The simple voice-activated software b. The complicated thought-activated software c. Neither of the software d. Need more information
The state of Massachusetts requires all citizens to purchase medical insurance or face a monetary penalty when filing their taxes. The penalty is significantly less than the average annual insurance premium. Moreover, the state requires insurance companies to issue policies to anyone who applies, regardless of their health at the time of application. Which of the following examples describes the
inherent adverse selection problem? a. Tricia purchases an insurance policy through her employer and visits her doctor for annual check-ups. b. Sue purchases insurance only after learning that she has cancer. c. Mike pays the penalty rather than purchasing insurance because it is cheaper for him than paying insurance premiums and he is generally in good health. d. Both b and c are correct.