"Animal Spirits" Refers to

question 65

Multiple Choice

"Animal spirits" refers to

• A)the stubborn refusal of many economic decision-makers to use rational expectations.
• B)movements in investment that cannot be explained by changes in current variables.
• C)the often-observed Fed refusal to cooperate with the government in setting its monetary policy.
• D)the impact of tax-evasion on the budget deficit.
• E) an exotic alcoholic drink favored by Wall Street traders.

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Definitions:

Interest Rate Parity

A theory which suggests that the difference in interest rates between two countries is equal to the expected change in exchange rates between their currencies.

Approximation Formula

A mathematical equation or expression used to estimate a value or to simplify calculations.