If you were a Keynesian economist, you would believe that the economy
a. will always move toward full-employment real GDP
b. has a tendency to generate inflation regardless of whether it's at full employment real GDP or not
c. will decrease unemployment by lowering wage rates until the labor market is in equilibrium
d. is driven by the supply-side of the market
e. may be in equilibrium at less than full employment
E
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If $1000 was deposited in a bank and the reserve requirement is 0.20, how much is available for loans?
A) $900 B) $910 C) $800 D) $930
Given the following formula for the Taylor rule:Target federal funds rate = natural rate of interest + current inflation + 1/2(inflation gap) + 1/2(output gap)Every one percent decrease in the rate of inflation will:
A. raise the target federal funds rate by 1.5%. B. lower the target federal funds rate by 0.5%. C. raise the target federal funds rate by 0.5%. D. lower the target federal funds rate by 1.5%.