The expectations effect is the
A) increase in the interest rate brought on by an expected increase in Real GDP.
B) increase in the interest rate due to a higher expected inflation rate.
C) decrease in the interest rate due to an expected increase in the supply of loanable funds.
D) idea that people form their expectations of inflation by considering all available information about past, present, and future inflation.
E) idea that people form their expectations of inflation by considering only information about past inflation experience.
B
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A. excluded from; excluded from B. excluded from; included in C. included in; included in D. included in; excluded from
Refer to the scenario above. The retailer adds a value of ________ to the production process
A) $3 billion B) $1 billion C) $10 billion D) $5 billion
Suppose the people of Florencia spend $60 and save $40 for every $100 they earn. In this case, the marginal propensity to save equals _____
a. 0.2 b. 0.7 c. 0.4 d. 0.8
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A. Goods and services B. Goods and services, minus U.S. purchases of assets abroad C. Goods and services, plus net investment income and net transfers D. Goods and services, plus foreign purchases of assets in the United States