When unemployment is below its natural rate, the inflation rate will eventually
A) move to its natural rate.
B) decrease.
C) become equal to the natural rate of unemployment.
D) increase.
D
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A decrease in the required reserve ratio will increase banks' excess reserves and decrease the money multiplier
a. True b. False Indicate whether the statement is true or false
A firm's implicit costs are
a. its maintenance costs b. its paid-out costs of production c. its main source of executive costs d. irrelevant to the determination of economic profit e. opportunity costs of production that do not involve money outlays
Bank regulation exists because public authorities are convinced that
a. the balance between public interest and safety does not affect profitability, and should be removed from the hands of managers. b. the balance between bank profitability and public interest cannot be handled with legislation, but can be handled with regulation. c. the balance between bank profitability and safety cannot be left to profit-maximizing managers. d. the balance between bank safety and public interest can best be obtained by reliance on the market.
For this question, assume that the Fed sets monetary policy according to the Taylor rule. Suppose current U.S. macroeconomic conditions are represented by the following: ? > ??* and u < un. Given this information, we would expect that the Fed will
A) implement a monetary contraction. B) implement a monetary expansion. C) maintain its current stance of monetary policy. D) more information is need to answer this question.