By purchasing large amounts of mortgage-backed securities (MBS) in 2009, the Federal Reserve’s goal was to
A. raise the price of MBS and raise their yields.
B. raise the price of MBS and lower their yields.
C. lower the price of MBS and raise their yields.
D. lower the price of MBS and lower their yields.
Answer: B
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Suppose the economy is in equilibrium with an output gap equal to zero and the actual inflation rate equals the expected inflation rate
If the economy experiences a negative demand shock, real GDP will become ________ potential GDP and the economy will move to the ________ along an existing Phillips curve. A) greater than; right B) greater than; left C) less than; right D) less than; left
A game in which players as a group gain at the end of the game is referred to as
A) zero-sum game. B) negative-sum game. C) positive-sum game. D) tit-for-tat game.
The most commonly held form of public debt is the
a. Treasury bond b. Treasury bill c. Treasury note d. savings bond e. savings bill
Critics of supply-side economics argue that
a. tax cuts do not affect supply, only demand. b. supply-siders exaggerate the effects of tax cuts. c. incentives have no effect on behavior. d. the goals of supply-siders are not supported by most economists.