The hypothesis that individuals base consumption on their expected long run average income is the
A) life cycle hypothesis.
B) forward looking expectation hypothesis.
C) permanent-income hypothesis.
D) None of the above.
C
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
According to the scenario above, in which of the following groups are all the people cyclically unemployed?
A) Jung B) Darrelo C) Jung and Rita D) Jung and Thorton E) Thorton
The use of government regulations and barriers in order to control trade is referred to as:
A) globalization. B) protectionism. C) liberalization. D) actualization.
Which of the following statements is incorrect with respect to the 1980s?
A) Corporate financing migrated from the short-term bank loan market to the commercial paper market. B) Money market funds could offer transactions services coupled with a diversified money market investment vehicle at very low costs because of advances in computer technology. C) Specialized monitoring services of commercial banks became more important because of new asset valuation models. D) Innovations in information technology made some small borrowers more "bankable."