The low interest rate policies of the Federal Reserve during 2002-2004,
a. indicated that monetary policy was highly restrictive.
b. increased the demand for housing, placing upward pressure on housing prices.
c. made home mortgages less attractive, weakening the demand for housing.
d. was on target with the federal funds rate proscribed by the Taylor rule.
B
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Suppose production in an economy is represented by a Cobb-Douglas production function
If each worker in the economy becomes more productive while the number of workers in the economy, the capital stock and the state of technology remains unchanged, ________. A) the inflation rate in the economy will decrease B) the exchange value of its currency will increase in the foreign exchange market C) the income per capita of the economy will decrease D) the gross domestic product of the economy will increase
The government agency that insures deposits held in banks in the United States is
A) the Federal Bank Insurance Corporation. B) the Federal Deposit Insurance Corporation. C) the Federal Asset Insurance Corporation. D) the Federal Reserve System.
Refer to Table 8-2. Suppose that a simple economy produces only four goods and services: shoes, DVDs, tomatoes, and ketchup. Assume one half of the tomatoes are used in making the ketchup and the other half of the tomatoes are purchased by households. Using the information in the above table, nominal GDP for this simple economy equals
A) $7,400. B) $6,400. C) $5,800. D) 2,440 units.
One of the popular myths about monopoly is that:
a. a monopolist is the single seller of a particular commodity. b. a monopolist can charge any price for his/her good. c. a monopolist is a price maker. d. a monopolist may earn positive profits even in the long run. e. a monopolist faces the market demand curve.