Which of the following was a lesson from the 2007–2009 financial crisis?
A. The financial system needed more leverage in order to operate.
B. The job of stabilizing the economy should be assigned exclusively to monetary policy.
C. Monetary policy is finished once the Fed reduces the federal funds rate to zero.
D. The business cycle still exists.
Answer: D
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Use the following table to answer the question below. Jane's Production Possibilities SchedulePounds of Green BeansPounds of Corn08020604040602080 0If Jane produces 40 pounds of green beans, she can produce ________ pounds of corn.
A. 40 B. 60 C. 0 D. 20
The real interest rate, business taxes, expected profits and business confidence, and capacity utilization are embedded in the slope of the investment function
Indicate whether the statement is true or false
Because Keynes assumed that the expected return on money was zero, he argued that people would
A) never hold money. B) never hold money as a store of wealth. C) hold money as a store of wealth when the expected return on bonds was negative. D) hold money as a store of wealth only when forced to by government policy.
Discretionary fiscal policy is best described as
A) a deliberate attempt to cause the economy to move to full employment and price stability more quickly than it might otherwise. B) a deliberate attempt to improve the functioning of free markets. C) an automatic change in income transfer payments to keep the economy at full employment. D) the design of a tax system that automatically stabilizes economic activity over time.