The expectations effect is the
A) increase in the interest rate brought on by an expected increase in Real GDP.
B) increase in the interest rate due to a higher expected inflation rate.
C) decrease in the interest rate due to an expected increase in the supply of loanable funds.
D) idea that people form their expectations of inflation by considering all available information about past, present, and future inflation.
E) idea that people form their expectations of inflation by considering only information about past inflation experience.
B
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In the United States, the lender of last resort is
A) Fannie Mae. B) the Federal Reserve. C) the Federal Deposit Insurance Corporation. D) Securities and Exchange Commission.
When there is multicollinearity in an estimated regression equation,
a. the coefficients are likely to be small. b. the t-statistics are likely to be small even though the R2 is large. c. the coefficient of determination is likely to be small. d. the problem of omitted variables is likely. e. the error terms will tend to have a cyclical pattern.