If people have ________________, an announced monetary contraction by the Fed that is credible could reduce inflation with little or no increase in inflation.
A. rational expectations
B. irrational expectations
C. no expectations
D. None of the above is correct.
Answer: A
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Under a fixed exchange rate system, the central bank must
a. have an unlimited supply of domestic currency. b. have a very large supply of foreign assets. c. follow a constant money growth rule. d. allow the money supply to adjust to keep interest rates and exchange rates unchanged.
The successor to GATT in 1995 is
A) the World Agreement on Tariff and Trade. B) the World Trade Organization. C) the World Trade Agreement. D) the World Trade and Tariff Organization.
Given aggregate demand, a decrease in aggregate supply creates:
a. a higher price level and a higher GDP level. b. a lower price level and a higher GDP level. c. cost-push inflation. d. demand-pull inflation.
What types of "rules" are a part of the rules of the game?
a. laws b. customs c. manners d. all of the above are parts of the rules of the game in economic systems