Banks are exposed to interest rate risk primarily because
A) interest rates are very difficult to forecast.
B) the maturities of banks' assets and liabilities differ.
C) borrowers from banks are prone to default.
D) depositors are always searching for a slightly higher interest rate.
A
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In the above figure, the demand curve for Good A shifts from D1 to D2 in Graph A when the price of Good B changes from P1 to P2 in Graph B. We can conclude that
A) Good A and Good B are substitutes. B) Good A and Good B are complements. C) Good A is a normal good but Good B is an inferior good. D) Good A and Good B are unrelated.
Which of the following schools of thought criticized the Fed's policy of targeting interest rates?
a. The new Keynesians b. The Keynesians c. The monetarists d. The classical economists e. The new classical economists