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Author Question: The tendency to deviate from sound long-run plans in the short-run is known as ________. A) the ... (Read 19 times)

audie

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on: Jun 30, 2018
The tendency to deviate from sound long-run plans in the short-run is known as ________.
 
  A) the failure of adaptive expectations
  B) the failure of rational expectations
  C) the time inconsistency problem
  D) the NIMBY, or not in my backyard problem

Question 2

Why did banks increase their holdings of excess reserves during the Financial Crisis of 2007-2009?
 
  What will be an ideal response?


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kaykay69

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Reply #1 on: Jun 30, 2018
Answer to Question 1

C

Answer to Question 2

Given the historically high level of uncertainty in the financial system, many banks wanted to increase their liquidity. Also, the Fed started to pay interest on excess reserves.


audie

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Reply 2 on: Jun 30, 2018
Gracias!

kjohnson

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Reply 3 on: Yesterday
Excellent

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