The primary assets for a bank are demand deposits

The impact of instituting investment tax credits is

A) to stimulate private sector investments and increase aggregate demand. B) to stimulate private production and increase aggregate supply. C) to encourage individuals to save in an effort to increase funds available for investment. D) to curtail in excessive lending by financial institutions.

The adaptive expectations hypothesis implies that people:

a. adjust their expectations quickly to policy changes. b. expect the next period to be pretty much like the recent past. c. will always be correct in their forecast for the next period. d. change their expectations about the future if policy changes.