From 1999-2001, the U.S. Federal Reserve ___ nominal interest rates, and it ___ the policy in 2001 due to concerns over ___
a. lowered; continued; recession
b. raised; reversed; inflation
c. raised; reversed; recession
d. lowered; continued; inflation
Answer: c. raised; reversed; recession
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Price cap regulation involves
A) setting the monopoly's price equal to its average total cost. B) setting the monopoly's price equal to its profit-maximizing price. C) setting a maximum price the monopoly may charge. D) assuming a natural monopoly will not charge a higher than profit-maximizing price. E) setting the monopoly's price equal to its marginal cost.
In the United States, domestic investment is greater than national saving
Indicate whether the statement is true or false
Which of the following is likely to increase the exchange rate of Yen to euros (¥/€)?
A) an increase in investment opportunities in the U.S. B) a decrease in investment opportunities in the eurozone C) an increase in demand for European goods in Japan D) a decrease in demand for European goods in Japan
Susie spends more of October thinking about her Halloween costume than she spends thinking about a proposed law that will be on the November ballot. Which of the following is true?
a. This behavior is rational if she expects a greater benefit from the costume than from any possible effect her vote could have on the proposed law. b. This behavior is rational if she is planning to spend the time from Halloween to Election Day thinking about the law. c. This behavior is not rational because the law is more important than the costume. d. In order for this behavior to be considered rational, it would have to be true that Susie is too ignorant to fully understand the law. e. In order for this behavior to be considered rational, it would have to be true that Susie would not be affected by the law.