According to rational expectations,
A) the Fed should focus its policies on interest rates.
B) the Fed should focus its policies on inflation.
C) the Fed should focus its policies on unemployment.
D) the Fed is unable to influence real economic activity.
D
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Another benefit from entering a currency union that is not optimal would include:
A) the idea that economies interconnected in a currency union with increased trade also develop a symmetry of demand shocks. B) the reduction of interdependence and an increase in self-sufficiency. C) the cessation of disagreement over trade protection. D) the possibility of increasing the currency area.
The U.S. is planning on imposing quotas on tires imported from china. Domestic retailers predict this will result in an increase in consumer prices on tires by about $10
Use a supply and demand graph with brief explanation to show the effects of an import quota. Assume the quota is binding.