As of 2004, the U.S., Canada, and Western Europe account for 60 percent of the world's annual consumption of goods and services while having only about 11 percent of the world's population

Suppose the Fed's primary goal is price stability and it aims to keep the inflation rate at 2%. If the inflation rate rose above 2%, what should it do?

A) pursue an expansionary monetary policy B) pursue a contractionary monetary policy C) reduce the required reserve ratio D) impose a temporary ceiling on the federal funds rate

The average investor must weigh the benefits of liquidity against

A) the high taxes generally levied on liquid assets. B) the lower returns on liquid assets. C) the high transactions costs involved in disposing of liquid assets. D) the greater variability in the nominal returns on liquid assets.