A rational expectation of the inflation rate is
A) always correct.
B) a forecast based on the forecasted actions of the Fed and other relevant determinant factors.
C) a forecast based only on the historical evolution of inflation over the last 100 years.
D) an expected inflation rate between 5 percent and 10 percent.
E) an expected inflation rate between 1 percent and 5 percent.
B
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The above table gives the initial balance sheet for Mini Bank. Mini Bank's actual reserve ratio equals ________
A) 25 percent B) 12.5 percent C) 33.3 percent D) 20 percent
Which of the following is an example of money left on the sidewalk?
a. Overconfident small investors making poor stock-trading choices and failing to learn from experience. b. A guitarist buying a high end model of a Fender Stratocaster when a low end version is available in the market. c. A librarian purchasing the latest editions of several social science books. d. A cancer patient insisting on getting treated at an expensive clinic instead of a general hospital.
Which of the following will most likely occur in the United States as the result of an unexpected rapid growth in real income in Canada and Mexico?
a. an increase in aggregate demand and output in the short run b. an reduction in aggregate demand and output in the short run c. a reduction in the price level d. a decrease in the natural rate of unemployment in the United States
Which of the following countries has the lowest export ratio?
A. Canada. B. Kuwait. C. Sweden. D. The United States.