The savings and loan crisis during the 1980s was due in large part to ______.
a. a sharp rise in interest rates making loans issued in the 1970s unprofitable
b. consumer fears about bank failures and a resulting cascade of bank runs
c. a lack of effective government-supported insurance on savings and loan deposits
d. increased government regulation of savings and loans institutions
a. a sharp rise in interest rates making loans issued in the 1970s unprofitable
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The flaw of the Classical model of the business cycle is that it
A) assumes away output fluctuations. B) assumes complete wage rigidity. C) assumes unrealistic fooling of workers. D) requires procyclical wage movements and continuous labor market equilibrium.
Under a regulatory fair price,
a. price is driven to zero b. revenues would just be sufficient to cover costs c. price is set equal to marginal revenue d. profit is set at the monopoly level e. revenues would be set equal to marginal cost
An increase in the reserve requirement increases reserves and decreases the money supply
a. True b. False Indicate whether the statement is true or false
Japan's long run fiscal situation
A) is worse than the U.S. partly because of declining overall population B) is not as bad as the U.S. in terms of Debt to GDP ratio C) is worse than the U.S. in terms of current interest rates on long term government bonds D) is in bad condition because of the hangover effects of World War II