As the Fed maintained interest rates at near zero during 2008-2012,
a. the economy recovered and the unemployment rate fell to normal levels.
b. households and businesses held larger money balances and the velocity of money fell substantially.
c. stock prices declined during 2010-2012, causing the economy to remain weak.
d. the earnings senior citizens derived from saving deposits and other forms of savings rose substantially, leading to higher incomes and a strong increase in aggregate demand.
B
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If a European importer can buy $10,000 for 11,100 euros, the exchange rate for the euro is ________.
A. 1 euro = $0.90 B. 1 euro = $1.11 C. 1 euro = $0.80 D. 1 euro = $0.95
An inferior good is one that consumers buy in smaller quantities when the price of that good rises.
Answer the following statement true (T) or false (F)
When a domestic currency is completely backed by a foreign currency and the note-issuing authority establishes a fixed exchange rate to this foreign currency, then the country is said to have
A) created a currency board. B) undergone dollarization. C) adopted a managed exchange system. D) adopted an exchange rate monetary system.
Which of the following categories of unemployment arises from macroeconomic causes?
a. Temporary unemployment b. Underemployment c. Structural unemployment d. Frictional unemployment e. Cyclical unemployment