A mortgage-backed security (MBS) is a type of bond whose interest payments and principal repayments derive from the monthly mortgage payments of many households.
Answer the following statement true (T) or false (F)
True
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Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream
If some bankers are moved to making ice cream, we get a small increase in the amount of ice cream produced and a large decrease in the amount of banking services provided. If the PPF has banking services on the vertical axis and ice cream on the horizontal axis, the effect of the change reflects A) decreasing opportunity costs. B) a bowed out PPF for banking services and ice cream. C) production efficiency. D) a shift to a flatter PPF.
Consider a market that is in equilibrium. If it experiences both a decrease in demand and an increase in supply, what can be said of the new equilibrium? The equilibrium:
A. price and quantity will both rise. B. quantity will definitely fall, while the equilibrium price cannot be predicted. C. price will definitely fall, while the equilibrium quantity cannot be predicted. D. price and quantity will both fall.
To close a recessionary gap using fiscal policy, the government can: a. increase government spending by the size of the gap
b. decrease government spending by the size of the gap. c. increase government spending by more than the size of the gap. d. increase government spending by less than the size of the gap. e. decrease government spending by more than the size of the gap.
When it comes to environmental policy,
a. choices are influenced by the costs and benefits that decision makers expect. b. values are subjective, as in other areas of the economy. c. policy choices often have unintended secondary effects. d. all of the above are true.