One complication in the process of reducing inflation by creating recessions is that the price level
a. adjusts more quickly to recessionary gaps than to inflationary gaps.
b. does not apply as it does in inflationary gaps.
c. always rises.
d. rarely falls.
d
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Which of the following is true?
a. The FDIC sets the reserve requirements for commercial banks. b. The Federal Reserve System guarantees the deposits in almost all banks up to a $250,000 limit per account. c. Since the Federal Reserve System was established in 1913, bank failures due to panic withdrawals have been virtually eliminated. d. If a bank should fail, the FDIC guarantees that depositors can get their funds up to a $250,000 limit per account.
By using the ceteris paribus assumption in conjunction with a model, economists can
A) suspend the rationality assumption. B) avoid having their model depend on any additional assumptions. C) hold certain factors constant. D) be sure that the model will predict correctly.