"Animal spirits" refers to
A) the stubborn refusal of many economic decision-makers to use rational expectations.
B) movements in investment that cannot be explained by changes in current variables.
C) the often-observed Fed refusal to cooperate with the government in setting its monetary policy.
D) the impact of tax-evasion on the budget deficit.
E) an exotic alcoholic drink favored by Wall Street traders.
B
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The steady state level of income per person in a country is a function of all the following EXCEPT:
a. the population growth rate. b. the rate of saving. c. the efficiency with which the economy employs the factors of production. d. the current level of income in the country.
Pegging a country's exchange rate to the dollar can be advantageous in all of the following situations except
A) if investors believe the dollar to be more stable than the domestic country's currency. B) if a country wishes to conduct independent monetary policy. C) if imports are a significant fraction of the goods the country's consumers buy. D) if the country has extensive trade with the United States.