According to John Taylor (for whom the Taylor rule is named), during the period 2002-early 2006 actual Fed policy was "too_________" , which he believes led to both interest rates being "too ________" and rising housing prices in the United States
A) contractionary; high
B) contractionary; low
C) expansionary; low
D) expansionary; high
C
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Recall the Application. Assume that immediately before the housing bubble burst, you purchased a $250,000 home and took out a $225,000 mortgage to make the purchase. When the bubble burst, the value of your home fell by 20 percent
The value of the home is now ________ and you owe the mortgage company ________. A) $180,000; $225,000 B) $200,000; $180,000 C) $200,000; $225,000 D) $180,000; $200,000
If an additional dollar spent on monitoring would reduce shirking by 10 minutes, then the firm will increase the worker's wage by $1 if this caused
A) shirking to increase by less than 10 minutes. B) shirking to decrease by more than 10 minutes. C) shirking to decrease by less than 10 minutes. D) monitoring to become unnecessary.
The "free rider problem" occurs in connection with
a. private goods. b. both public and private goods. c. goods that are not scarce. d. public goods.
If there is a greater degree of economic integration between markets in the home country and the base country:
A) the home country will benefit to a greater degree by fixing its exchange rate with the base country. B) efficiency will be reduced with fixed exchange rates. C) flexible exchange rates will result in GDP stability. D) the volume of transactions will be too low to justify an elaborate exchange rate policy.