When the central bank announces the inflation rate that it will achieve over the next one to four years, it is following a strategy known as
A. real business cycle targeting.
B. inflation targeting.
C. a currency board.
D. money targeting.
Answer: B
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When the price of an asset is growing rapidly, speculators:
A. usually look for other investment opportunities. B. have a strong incentive to sell the asset before its price gets even higher. C. often rush to buy the asset in the hopes of selling it later at a profit. D. typically refrain from buying the asset because they know its price will eventually fall.
Applied research is the search for knowledge without a clue about the end of the research
a. True b. False Indicate whether the statement is true or false
Which of the following could be a direct cause of investment spending decreasing?
A. A firms revenues increases while their costs remain constant. B. Real income increases. C. Real interest rates increase. D. Expected future income increases.
When there is a threat of inflation in the economy, the Fed can ________ the federal funds rate so as to ________ aggregate demand and ________ the price level
A) lower; increase; decrease B) raise; decrease; increase C) lower; increase; increase D) raise; decrease; decrease E) raise; increase; decrease