The order of integration
A) can never be zero.
B) is the number of times that the series needs to be differenced for it to be stationary.
C) is the value of ?1 in the quasi difference(?Yt - ?1Yt-1).
D) depends on the number of lags in the VAR specification.
Answer: B
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Prior to 2008, a bank might have borrowed reserves from another bank because:
A. banks never borrowed from the Fed. B. it kept its reserves too low and could not meet Fed requirements. C. borrowing reserves from other banks is the only way to gain access to reserves. D. it was in danger of becoming insolvent and collapsing.
What can the Federal Reserve do to reduce the natural rate of unemployment?
A) nothing B) follow expansionary monetary policy that will reduce inflation C) follow expansionary monetary policy that will increase inflation D) follow contractionary monetary policy that will increase inflation