Why is it difficult to determine whether fluctuations in the target interest rate have led to business cycle fluctuations in the United States, according to the New Keynesian model?
A) Because the Federal Reserve may change the target interest rate according to economic conditions.
B) Because the target interest rate is nominal, not real.
C) Because inflation is not well measured.
D) Because money is neutral.
A
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Of the following countries, which is the best example of a command economy?
A) the United States B) Cuba C) Japan D) Brazil
Quantitative forecasting that projects past data without explaining the reasons for future trends is called
A) scientific forecasting. B) dumb forecasting. C) empirical forecasting. D) naïve forecasting.
What happens when consumers react to an increase in a good's price by consuming less of that good and more of other goods
a. elasticity of demand b. substitution effect c. law of demand d. complement e. substitute
Suppose a bank has $100 million in checking account deposits with no excess reserves and the required reserve ratio is 10 percent. If the Federal Reserve reduces the required reserve ratio to 8 percent, then the bank can make a maximum loan of
A) $0. B) $2 million. C) $8 million. D) $10 million.