According to the rational expectations theory, expansionary monetary policy will
a. reduce inflation.
b. lead to inflation and the higher rate of inflation will be quickly anticipated.
c. reduce unemployment because people will generally underestimate the inflationary side effects of the monetary expansion.
d. accelerate inflation in the short run, but in the long run the primary effect will be an increase in employment.
B
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Which of the following statements is TRUE about the role of gifts given to U.S. citizens from foreign residents?
A) Gifts are not included in the balance of payments because of the nature of the gift. B) Gifts are only included in the balance of payments if the gift is given to a government official. C) Gifts are included in the balance of payments. D) Gifts given to U.S. citizens are not included in the balance of payments but gifts given to foreigners are included.
The discount rate is the interest rate that
a. banks charge one another for loans. b. banks charge the Fed for loans. c. the Fed charges banks for loans. d. the Fed charges Congress for loans.