Which of the following is an accurate statement about the Great Depression?
(A) It was a recession that became a depression because of World War II.
(B) It was the most severe economic downturn in the history of industrial capitalism.
(C) It was set off because of a sharp and unexpected rise in interest rates.
(D) Its effects and duration would have been even worse if it weren't for a strong economy in Japan and Europe at the time.
Ans: (B) It was the most severe economic downturn in the history of industrial capitalism.
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In the market for reserves, if the federal funds rate is between the discount rate and the interest rate paid on excess reserves, an increase in the reserve requirement ________ the demand of reserves and causes the federal funds interest rate to
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Related to the Economics in Practice on p. 647: Surveys by the bank of England suggest that consumers tend to expect future inflation to be
A. relatively unpredictable. B. what they perceive past inflation to have been. C. directly related to the interest rate. D. equal to the actual estimates of past inflation made by the government.