1. Do rational expectations tend to look back at past experience while adaptive expectations look ahead to the future? Explain your answer.

2. Legislation proposes that the government should use macroeconomic policy to achieve an unemployment rate of zero percent, by increasing aggregate demand for as much and as long as necessary to accomplish this goal. From a neoclassical perspective, how will this policy affect output and the price level in the short run and in the long run? Sketch an aggregate demand/aggregate supply diagram to illustrate your answer.

3. Would it make sense to argue that rational expectations economics is an extreme version of neoclassical economics? Explain.

3. Suppose U.S. interest rates decline compared to the rest of the world. What would be the likely impact on the demand for dollars, supply of dollars, and exchange rate for dollars compared to, say, euros?

4. Suppose Argentina gets inflation under control and the Argentine inflation rate decreases substantially. What would likely happen to the demand for Argentine pesos, the supply of Argentine pesos, and the peso/U.S. dollar exchange rate?

5. This chapter has explained that "one of the most economically destructive effects of exchange rate fluctuations can happen through the banking system," if banks borrow from abroad to lend domestically. Why is this less likely to be a problem for the U.S. banking system?

6. A booming economy can attract financial capital inflows, which promote further growth. However, capital can just as easily flow out of the country, leading to economic recession. Is a country whose economy is booming because it decided to stimulate consumer spending more or less likely to experience capital flight than an economy whose boom is caused by economic investment expenditure?

4. Summarize the Keynesian and Neoclassical models.

6.When would an individual encounter invasion of privacy law?

7.Define a trademark.

8.What mouthful of an acronym represents the steps of a public relations plan?

9.Define research. (The Broom & Dozier definition.)

10.What must you understand before you can launch an effective Public Relations program?

11.Identify some of the reasons research is important.

12.What are the four segments/types of research?

13.Why is reliability a research standard? Consistency; similar results are achieved when research is repeated.

14.What is considered valid research?

15.Define analysisr.