Many large urban banks experienced heavy losses during the 1980s and 1990s. Many of the losses at urban banks can be attributed to
a. heavy international loan commitments and risky investments
b. widespread bank panics during the late 1980s
c. extraordinary oil profits of Saudi Arabia and Venezuela
d. investing too heavily in farm machinery
e. the U.S. trade deficit with Japan
A
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Starting on a Phillips curve with expected inflation equal to 5% and unemployment at its natural rate, show what happens to unemployment if the Fed tries to reduce inflation, but has no credibility
As time passes and people realize that the inflation rate is now lower, what happens to the short-run Phillips curve?
In the Keynesian model, if the actual price level is higher than the expected price level, then
a. output is above potential output. b. output is always at potential output. c. output is below potential output. d. output is moving towards potential output.
The sum of national saving and capital inflows from abroad must equal:
A. capital outflows. B. aggregate demand. C. the trade deficit. D. domestic investment in new capital goods.
All of the following are functions of the Federal Reserve System EXCEPT
A. acting as the government's fiscal agent. B. supplying the economy with fiduciary currency. C. lending funds to risky customers denied credit by commercial banks. D. providing a system of check collection and clearing.