Why did some economists and policymakers criticize the Fed and Treasury for arranging the sale of Bear Stearns to JP Morgan Chase in 2008?
What will be an ideal response?
The main concern was with the moral hazard problem, which is the possibility that managers of financial firms such as Bear Stearns might make riskier investments if they believe that the federal government will save them from bankruptcy.
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Miniville is an isolated town located on the southern shore of Lake Condescending, a very large lake. The western edge of Miniville is adjacent to impassable mountains and there are no towns or businesses for many miles to the east. The 300 residents of Miniville are evenly distributed along 3 miles of shoreline on the lake, east of the mountains. Lake Shore Drive, the only street in town, provides access to Miniville's homes and businesses. All residents live between the lake and the street; businesses locate on the other side of the street. Lake Shore Drive is 3 miles long, and the points labeled A, B, and C are 1, 2, and 3 miles from the western end of Lake Shore Drive, respectively. All residents of Miniville shop at the store located closest to their homes. src="https://sciemce.com/media/4/ppg__rrr0818190951__f1q217g1.jpg" alt="" style="vertical-align: 0.0px;" height="117" width="538" />If one store is located at A and the other store is located at B:
A. exactly half of the people living west of B will shop at the store at B.
B. all of the people living between A and the mountains will shop at the store at A.
C. some, but not all, of the people living east of B will shop at the store at B.
D. exactly half of the people living east of B will shop at the store at B.
When using the income approach to calculate nominal GDP, you should ________.
A. subtract transfer payments B. add transfer payments C. subtract indirect business taxes D. add indirect business taxes
A union evaluates job offers based on the
A. Impact on the wage rate for all union members. B. Location of the work, either in the private or public sector. C. Individual interests of its members. D. Collective interests of its members.
If the supply curve and the demand curve for lettuce both shift to the left by an equal amount, what can we say about the resulting changes in equilibrium price and quantity?
A) The price will increase, but the quantity may increase or decrease. B) The price will increase, and the quantity will increase. C) The price will decrease, and the quantity will increase. D) The price will stay the same, but the quantity will increase. E) The price will stay the same, but the quantity will decrease.