Economics

The model of expectations in which the current level of inflation depends on past levels is referred ...

The model of expectations in which the current level of inflation depends on past levels is referred ...

[html]The model of expectations in which the current level of inflation depends on past levels is referred to as the ________.

▸ realized real expectations model

▸ adaptive expectations model

▸ rational expectations model

▸ composite expectations

cacerami   154   1 Reply

desai.sumeet1

Inflation expectations are an economic agent's beliefs about ________.

Inflation expectations are an economic agent's beliefs about ________.

Inflation expectations are an economic agent's beliefs about ________.

▸ future inflation rates

▸ past inflation rates

▸ present inflation rates

▸ all of the above

kwmusick   81   1 Reply

iffn23

A firm takes a 2-year loan at a nominal interest rate of 8 percent. It believes that the inflation ...

A firm takes a 2-year loan at a nominal interest rate of 8 percent. It believes that the inflation ...

[html]A firm takes a 2-year loan at a nominal interest rate of 8 percent. It believes that the inflation rate will be 4 percent this year and 2 percent next year. What annual average real interest rate does the firm expect to pay?

▸ 2 percent

▸ 3 p

wilcoxj49   91   1 Reply

KFord

A firm takes out a 2-year loan at a nominal interest rate of 7 percent. It believes that the ...

A firm takes out a 2-year loan at a nominal interest rate of 7 percent. It believes that the ...

[html]A firm takes out a 2-year loan at a nominal interest rate of 7 percent. It believes that the inflation rate will be 2 percent this year and 4 percent next year. What annual average real interest rate does the firm expect to pay?

▸ 2 percent

▸

JSmith1   90   1 Reply

Sagxar

Suppose that General Motors is deciding whether to build a new large automobile plant. It intends to ...

Suppose that General Motors is deciding whether to build a new large automobile plant. It intends to ...

[html]Suppose that General Motors is deciding whether to build a new large automobile plant. It intends to borrow money to finance the new plant. Which of the following is NOT known to General Motors when it decides whether to build the new plant?

▸

tls043   536   1 Reply

oth987

When examining the effects of interest rates on borrowing decisions, we distinguish between the ...

When examining the effects of interest rates on borrowing decisions, we distinguish between the ...

[html]When examining the effects of interest rates on borrowing decisions, we distinguish between the short-term and the long-term. How long is the long-term in this context?

▸ 1 year or more

▸ Anything longer than an overnight (24-hour) loan

▸ 10

ogf78   76   1 Reply

hamusa4

Firm investment depends most strongly on which of the following?

Firm investment depends most strongly on which of the following?

Firm investment depends most strongly on which of the following?

▸ The federal funds rate

▸ The inflation rate

▸ The long-term nominal interest rate

▸ The long-term real interest rate

ticktrader   78   1 Reply

andrat

Suppose that the Federal Reserve increases the federal funds rate by 1 percent. What would we expect ...

Suppose that the Federal Reserve increases the federal funds rate by 1 percent. What would we expect ...

[html]Suppose that the Federal Reserve increases the federal funds rate by 1 percent. What would we expect to happen to the long-term expected real interest rate?

▸ It would decrease by less than 1 percent.

▸ It would decrease by exactly 1 percent.

citycyborg   157   1 Reply

live4outdoors

Suppose that the Federal Reserve decreases the federal funds rate by 1 percent. What would we expect ...

Suppose that the Federal Reserve decreases the federal funds rate by 1 percent. What would we expect ...

[html]Suppose that the Federal Reserve decreases the federal funds rate by 1 percent. What would we expect to happen to the long-term expected real interest rate?

▸ It would decrease by less than 1 percent.

▸ It would not change.

▸ It would increa

melisooflyy   130   1 Reply

chanelfargesen

Suppose the interest rate that banks in Techland charge one another for overnight loans is 5 ...

Suppose the interest rate that banks in Techland charge one another for overnight loans is 5 ...

[html]Suppose the interest rate that banks in Techland charge one another for overnight loans is 5 percent, the long-term nominal interest rate is 4.5 percent, and the long-term expected inflation rate is 3 percent.
a) What is the long-term exp

bmh12e   82   1 Reply

schmience

Which of the following statements is TRUE?

Which of the following statements is TRUE?

[html]Which of the following statements is TRUE?

▸ The Fed can reduce the growth of money supply by increasing growth in bank reserves.

▸ The Fed has the power to dictate the amount of deposits held with commercial banks.

▸ The rate of inflation i

imomo   71   1 Reply

dorkiexcici

If there are no changes in inflation expectations, a sale of government bonds by the Fed in the open ...

If there are no changes in inflation expectations, a sale of government bonds by the Fed in the open ...

[html]If there are no changes in inflation expectations, a sale of government bonds by the Fed in the open market will cause ________.

▸ both the federal funds rate and the long-term expected real interest rate to rise

▸ the federal funds rate to r

snowga   122   1 Reply

letssdoothiss

If there are no changes in inflation expectations, a fall in the federal funds rate ________.

If there are no changes in inflation expectations, a fall in the federal funds rate ________.

[html]If there are no changes in inflation expectations, a fall in the federal funds rate ________.

▸ decreases both the long-term nominal interest rate and the long-term expected interest rate

▸ decreases the long-term nominal interest rate and in

alphalions   82   1 Reply

nilabmirzada

Changes in the federal funds rate ________.

Changes in the federal funds rate ________.

[html]Changes in the federal funds rate ________.

▸ change the long-term expected interest rates in the opposite direction

▸ change the long-term expected interest rates in the same direction

▸ have no effect on the long-term expected interest rat

Jgal   84   1 Reply

channy40

If the expected real interest rate in an economy is 6 percent and the expected inflation rate is 4 ...

If the expected real interest rate in an economy is 6 percent and the expected inflation rate is 4 ...

If the expected real interest rate in an economy is 6 percent and the expected inflation rate is 4 percent, then the nominal interest rate in the economy is ________.

▸ 14 percent

▸ 10 percent

▸ 6 percent

▸ 4 percent

Neptunesx101x   83   1 Reply

michaelfidanza

If the nominal interest rate in an economy is 9 percent and the expected inflation rate is 6 ...

If the nominal interest rate in an economy is 9 percent and the expected inflation rate is 6 ...

If the nominal interest rate in an economy is 9 percent and the expected inflation rate is 6 percent, then the expected real interest rate in the economy is ________.

▸ 9 percent

▸ 6 percent

▸ 3 percent

▸ 15 percent

tootsiebrowny   75   1 Reply

manuella14

Which of the following equations is correct?

Which of the following equations is correct?

[html]Which of the following equations is correct?

▸ Expected real interest rate = Nominal interest rate ÷ Expected inflation rate.

▸ Expected real interest rate = Nominal interest rate + Expected inflation rate.

▸ Expected real interest rate = Ex

carlvh37   71   1 Reply

pipi123

If the realized real interest rate in an economy is 6 percent, the realized inflation rate is 8 ...

If the realized real interest rate in an economy is 6 percent, the realized inflation rate is 8 ...

[html]If the realized real interest rate in an economy is 6 percent, the realized inflation rate is 8 percent, and the expected inflation rate is 8 percent, then the nominal interest rate in the economy is ________.

▸ 20 percent

▸ 8 percent

▸ 2 pe

onetouch   84   1 Reply

wonton1

If the realized real interest rate in an economy is 6 percent, the nominal interest rate is 8 ...

If the realized real interest rate in an economy is 6 percent, the nominal interest rate is 8 ...

[html]If the realized real interest rate in an economy is 6 percent, the nominal interest rate is 8 percent, and the expected inflation rate is 8 percent, then the realized inflation rate in the economy is ________.

▸ 6 percent

▸ 4 percent

▸ 2 per

mhbtelc   73   1 Reply

jmoline2

Which of the following equations is correct?

Which of the following equations is correct?

[html]Which of the following equations is correct?

▸ Realized real interest rate = Nominal interest rate + Realized inflation rate.

▸ Realized real interest rate = Nominal interest rate ‒ Realized nominal interest rate.

▸ Realized real interest ra

Heybonita   80   1 Reply

careytran

The federal funds rate is a ________.

The federal funds rate is a ________.

The federal funds rate is a ________.

▸ short-term real interest rate

▸ long-term nominal interest rate

▸ short-term nominal interest rate

▸ long-term real interest rate

pixiedust7891   79   1 Reply

wardasid

In an economy, investment is most likely to be dependent on ________.

In an economy, investment is most likely to be dependent on ________.

In an economy, investment is most likely to be dependent on ________.

▸ the short-term real interest rate

▸ the short-term nominal interest rate

▸ the long-term nominal interest rate

▸ the long-term real interest rate

testipw   77   1 Reply

collegestudent1

If the nominal interest rate in an economy is 6 percent and the inflation rate in the economy is 10 ...

If the nominal interest rate in an economy is 6 percent and the inflation rate in the economy is 10 ...

If the nominal interest rate in an economy is 6 percent and the inflation rate in the economy is 10 percent, then the real interest rate is ________.

▸ ‒4 percent

▸ 6 percent

▸ ‒6 percent

▸ 10 percent

joshtatum92   91   1 Reply

CJWVail2

If the nominal interest rate in an economy is 8 percent and the real interest rate is 4 percent, the ...

If the nominal interest rate in an economy is 8 percent and the real interest rate is 4 percent, the ...

If the nominal interest rate in an economy is 8 percent and the real interest rate is 4 percent, the inflation in the economy is ________.

▸ 4 percent

▸ 12 percent

▸ 8 percent

▸ 32 percent

jason23   115   1 Reply

ugotpwned5

Which is the Federal Reserve more concerned about, the inflation rate or the money supply?

Which is the Federal Reserve more concerned about, the inflation rate or the money supply?

[html]Which is the Federal Reserve more concerned about, the inflation rate or the money supply?

▸ The Fed is more concerned about the inflation rate during expansions and the money supply during recessions.

▸ The Fed is equally concerned about the

thallium81   70   1 Reply

ixi12

Rising inflation is a pressing concern of the government of Utopia. Suggest a suitable monetary ...

Rising inflation is a pressing concern of the government of Utopia. Suggest a suitable monetary ...

Rising inflation is a pressing concern of the government of Utopia. Suggest a suitable monetary policy that the central bank can adopt to lower the rate of inflation.

jadelga3   72   1 Reply

gronk44

Which of the following financial organizations has the ability to influence the supply of reserves ...

Which of the following financial organizations has the ability to influence the supply of reserves ...

Which of the following financial organizations has the ability to influence the supply of reserves in the United States?

▸ Private commercial banks

▸ The World Bank

▸ The Fed

▸ Public sector banks

jake82   83   1 Reply

ecunis1

Is there any difference between borrowing from the federal funds market and borrowing from the ...

Is there any difference between borrowing from the federal funds market and borrowing from the ...

Is there any difference between borrowing from the federal funds market and borrowing from the discount window? Explain.

BrandyBraden   70   1 Reply

bruce2710

Why is the Fed referred to as the "lender of last resort"?

Why is the Fed referred to as the "lender of last resort"?

Why is the Fed referred to as the "lender of last resort"?

samestepp   73   1 Reply

webmom2008

Which of the following statements is TRUE?

Which of the following statements is TRUE?

[html]Which of the following statements is TRUE?

▸ The discount window is accessible only to well-performing banks.

▸ The discount window operates only in periods of economic expansion.

▸ The discount window in the United States is operated by the

adotey   65   1 Reply

TAE29

A commercial bank's last resort for borrowing reserves is ________.

A commercial bank's last resort for borrowing reserves is ________.

A commercial bank's last resort for borrowing reserves is ________.

▸ the federal funds market

▸ foreign banks

▸ the central government

▸ the discount window

itpf04   61   1 Reply

gsh2571

Which is higher, the federal funds rate or interest rate on loans made from the Fed's discount window?

Which is higher, the federal funds rate or interest rate on loans made from the Fed's discount window?

[html]Which is higher, the federal funds rate or interest rate on loans made from the Fed's discount window?

▸ The interest rate on loans made from the Fed's discount window is higher.

▸ Sometimes one is higher, and sometimes the other is higher.

hellchicken   61   1 Reply

edatay

Which of the following methods for influencing the federal funds rate was first approved by Congress ...

Which of the following methods for influencing the federal funds rate was first approved by Congress ...

[html]Which of the following methods for influencing the federal funds rate was first approved by Congress for use by the Federal Reserve during the 2007−2009 recession?

▸ Changing the quantity of reserves supplied

▸ Changing the interest rate paid

mickied   81   1 Reply

hizzy117

Which of the following methods for influencing the federal funds rate has NOT been used by the ...

Which of the following methods for influencing the federal funds rate has NOT been used by the ...

[html]Which of the following methods for influencing the federal funds rate has NOT been used by the Federal Reserve in the past 20 years?

▸ Changing the interest rate paid on reserves

▸ Changing the quantity of reserves supplied

▸ Changing the re

jugganuts   60   1 Reply

letssdoothiss

Which of the following methods for influencing the federal funds rate is most commonly used by the ...

Which of the following methods for influencing the federal funds rate is most commonly used by the ...

[html]Which of the following methods for influencing the federal funds rate is most commonly used by the Federal Reserve?

▸ Changing the interest rate paid on reserves

▸ Changing the quantity of reserves supplied

▸ Changing the reserve requirement

pjw1979   302   1 Reply

dorkiexcici

The Federal Reserve can influence the federal funds rate by shifting ________.

The Federal Reserve can influence the federal funds rate by shifting ________.

[html]The Federal Reserve can influence the federal funds rate by shifting ________.

▸ only the quantity of reserves supplied

▸ either the quantity of reserves supplied or the demand curve for reserves

▸ only the demand curve for reserves

▸ neith

onlineerica   61   1 Reply

RobnHood

In the Federal Funds Market model, the demand for federal funds is a ________ line, while the supply ...

In the Federal Funds Market model, the demand for federal funds is a ________ line, while the supply ...

[html]In the Federal Funds Market model, the demand for federal funds is a ________ line, while the supply of federal funds is a(n) ________ line.

▸ downward-sloping; upward-sloping

▸ vertical; upward-sloping

▸ downward-sloping; vertical

▸ horizo

karamvir19   97   1 Reply

djbo89

In the Federal Funds Market model, the y-axis shows the ________, while the x-axis shows the ________.

In the Federal Funds Market model, the y-axis shows the ________, while the x-axis shows the ________.

[html]In the Federal Funds Market model, the y-axis shows the ________, while the x-axis shows the ________.

▸ federal funds rate; quantity of reserves

▸ quantity of

courtneyjuma   60   1 Reply

twogat123

What can the central bank of Autarkia do to lower the rate that banks charge one another for ...

What can the central bank of Autarkia do to lower the rate that banks charge one another for ...

What can the central bank of Autarkia do to lower the rate that banks charge one another for overnight loans? How will this affect the economy if it is facing a downturn?

capella234   68   1 Reply

Grem

Suppose the U.S. economy is recovering from a long recession. How will this affect the demand curve ...

Suppose the U.S. economy is recovering from a long recession. How will this affect the demand curve ...

Suppose the U.S. economy is recovering from a long recession. How will this affect the demand curve for reserves and the federal funds rate? Explain with a diagram.

Anthonyling   63   1 Reply

yoliness