In adaptive expectations, people and firms
a. immediately change their behavior based on past events.
b. perfectly change their behavior based on past events.
c. gradually change their behavior based on past events, but not perfectly.
d. perfectly and gradually change their behavior based on past events.
c. gradually change their behavior based on past events, but not perfectly.
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All economic questions arise because we
A) want more than we can get. B) want more than we need. C) have an abundance of resources. D) have limited wants that need to be satisfied.
The Fed buys $100 million of government securities from Bank A. What is the effect on Bank A's balance sheet?
A) Securities decrease by $100 million and reserves increase by $100 million. B) Securities decrease by $100 million and deposits decrease by $100 million. C) Securities increase by $100 million and reserves decrease by $100 million. D) Securities increase by $100 million and reserves increase by $100 million.
A system of managed floating exchange rates is
A) a system in which governments may attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed. B) a system in which governments use flexible exchange rates. C) a system in which governments are forbidden from attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed. D) a system in which governments need to reach a prior agreement among them before they may attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed. E) a system in which governments use extensive fiscal policy to discourage exchange rate movements.
Its Consumer Advisory Committee conducts open market operations of the Fed
Indicate whether the statement is true or false