Author Question: Suppose Kaylee withdraws 4,000 from her bank. If the reserve ratio is 25 percent, then this will ... (Read 51 times)

savannahhooper

  • Hero Member
  • *****
  • Posts: 576
Suppose Kaylee withdraws 4,000 from her bank. If the reserve ratio is 25 percent, then this will lead to a decrease in M1 of
 
  A) 1,000. B) 4,000. C) 8,000. D) 12,000.

Question 2

Differentiate between the adaptive expectations and the rational expectations models of inflation.
 
  What will be an ideal response?



mammy1697

  • Sr. Member
  • ****
  • Posts: 341
Answer to Question 1

D

Answer to Question 2

The adaptive expectations model of inflation states that inflationary expectations are determined by the level of inflation in the recent past. Conversely, the rational expectations model assumes that people have highly sophisticated beliefs about inflation that rationally incorporate all the information available to them.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question


 

Did you know?

Asthma is the most common chronic childhood disease in the world. Most children who develop asthma have symptoms before they are 5 years old.

Did you know?

A recent study has found that following a diet rich in berries may slow down the aging process of the brain. This diet apparently helps to keep dopamine levels much higher than are seen in normal individuals who do not eat berries as a regular part of their diet as they enter their later years.

Did you know?

Historic treatments for rheumatoid arthritis have included gold salts, acupuncture, a diet consisting of apples or rhubarb, nutmeg, nettles, bee venom, bracelets made of copper, prayer, rest, tooth extractions, fasting, honey, vitamins, insulin, snow collected on Christmas, magnets, and electric convulsion therapy.

Did you know?

Alcohol acts as a diuretic. Eight ounces of water is needed to metabolize just 1 ounce of alcohol.

Did you know?

All adverse reactions are commonly charted in red ink in the patient's record and usually are noted on the front of the chart. Failure to follow correct documentation procedures may result in malpractice lawsuits.

For a complete list of videos, visit our video library