How did the Fed combat the Great Recession?
a. It kept the target rate stable for three years and then increased it to 5 percent.
b. It increased the target rate from 1 percent to 5 percent, where it stayed for three years.
c. It reduced the target rate from 5 percent to close to zero, where it stayed for seven years.
d. It kept the target rate stable for seven years and then reduced it to close to zero percent.
c. It reduced the target rate from 5 percent to close to zero, where it stayed for seven years.
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The model of expectations in which the current level of inflation depends on past levels is referred to as:
A) realized real expectations. B) adaptive expectations. C) rational expectations. D) composite expectations.
A black market can emerge for a good if ________
A) the good is taxed heavily B) there is an excess supply of a good C) the consumption of the good is subsidized D) the production of the good is subsidized
If the interest rate is 8 percent, the present value of $10,000 to be received 10 years from today is about
A) $21,589. B) $9,259. C) $4,632. D) $10,800.
Tacit collusion occurs in industries that
a. are monopolistically competitive b. contain price leaders c. experience rapid technological change d. are regulated e. produce very differentiated products