The European Union (EU) is an example of a
A) customs union.
B) free trade area.
C) reciprocal trade agreement.
D) None of the above.
A
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Suppose the Fed has a target inflation rate of 3%, the Fed always hits its target, and the inflation rate has been 3% for several years
Furthermore, assume Amazon sets the price of its Kindle Fire at $140 in 2012 and wants to keep the real price of the Kindle constant in order to maximize profits. Now suppose that the Fed announces on January 1, 2013 that it will decrease its target rate for inflation to 1%. If Amazon has adaptive expectations, it will set its price for the Kindle in 2013 at A) $137.20. B) $140.00. C) $141.40. D) $144.20.
A decrease in the economy's expected future income while holding today's income constant would
A. increase today's desired consumption and decrease desired national saving. B. decrease today's desired consumption and increase desired national saving. C. increase today's desired consumption and increase desired national saving. D. decrease today's desired consumption and decrease desired national saving.