In 2008, the Treasury and Federal Reserve took several actions in response to the deepening financial crisis. One action was that the Fed announced it would loan up to $200 billion of Treasury securities in exchange for
A) stock.
B) mortgage-backed securities.
C) corporate bonds.
D) required bank reserves.
Answer: B
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Open market sale of government securities by the Fed decreases the federal funds rate
Indicate whether the statement is true or false
The concept of diversification is captured by the statement
A) don't look a gift horse in the mouth. B) don't put all your eggs in one basket. C) it never rains, but it pours. D) make hay while the sun shines.
If you were building a macroeconomic model that explores the effect of an increase in income tax rates on the size of the labor force, the endogenous variable(s) would be
A) income tax rates. B) the size of the labor force. C) both income tax rates and the size of the labor force. D) neither income tax rates nor the size of the labor force.
Why do you think that the demand for coffee is less elastic than the demand for restaurant meals?
What will be an ideal response?