When people look at what has just happened in the economy to conjecture what is about to happen, it is known as ______.
a. gradualism
b. indexing
c. adaptive expectations
d. natural rate
c. adaptive expectations
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A study of expenditures on food in cities resulting in the following equation: Log E = 0.693 Log Y + 0.224 Log N where E is Food Expenditures; Y is total expenditures on goods and services; and N is the size of the family. This evidence implies:
a. that as total expenditures on goods and services rises, food expenditures falls. b. that a one-percent increase in family size increases food expenditures .693%. c. that a one-percent increase in family size increases food expenditures .224%. d. that a one-percent increase in total expenditures increases food expenditures 1%. e. that as family size increases, food expenditures go down.
Suppose Laqueta deposits $10,000 of cash into a checking account at a commercial bank. The immediate effect is
a. a $10,000 decrease in the M1 money supply. b. no change in the M1 money supply, but in the future, the M1 money supply will tend to decrease because the bank now has excess reserves. c. no change in the M1 money supply, but in the future, the M1 money supply will tend to expand because the bank now has excess reserves. d. a $10,000 increase in the M1 money supply.
Given freedom of movement for both goods and resources, if Florida producers specialize in oranges and Georgia producers specialize in peaches, it would be reasonable to conclude that
What will be an ideal response?
Which one of the following policies might the Fed initiate if it wanted to increase the money supply?
A. Sell government securities B. Increase the reserve requirement C. Increase the discount rate D. Decrease the reserve requirement