The equation now called the ______________ starts with a 2 percent real interest rate, and then instructs the Fed to lower the interest rate in proportion to any recessionary gap and to raise it in proportion to any excess of inflation above 2 percent.

Much of the credit for prevention of a financial market meltdown after "Black Monday" (October 19, 1987 ) must be given to the Federal Reserve System and then-chairman

A) Paul Volcker. B) Alan Blinder. C) Arthur Burns. D) Alan Greenspan.

Recall the Application about the Native American Tribes in Michigan that had a monopoly in casino gambling to answer the following question(s).Recall the Application. The tribes agreed to pay the state a share of their profits in exchange for being granted a monopoly in casino gambling. What economic concept does this illustrate?

A. profit maximization B. rent seeking C. irrational behavior D. None of these