During the Great Recession that began in 2007, the Fed lowered interest rates to almost 0%. What did it do to accomplish this policy?
A) Decreased the money supply.
B) Both choices 'a' and 'c'.
C) Increased the money supply.
D) Sold bonds on the open market.
Ans: C) Increased the money supply.
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When a country adds more capital to its existing stock:
A. it experiences rapidly increasing rates of growth. B. the additional productivity is less than the previous increases to productivity. C. it experiences rapid declines in its level of income. D. the additional productivity is more than the previous increases to productivity.
A phenomenon called Moore's law says:
A. computing capacity has doubled every two years. B. physical capital will double every two years in countries with high rates of growth. C. 70 divided by the growth rate equals how long it will take a country to double its income level. D. 70 divided by the growth rate equals how long it will take a country to double its productive capacity.
Assume you have $2,000 in a savings account at the beginning of the year and the price level is equal to 100. If the price level is equal to 120 at the end of the year, the real value of your savings is closest to
A. $1,880. B. $2,120. C. $1,667. D. $2,400.
Relative to a market with perfect information, in a market with imperfect information:
A. some goods will be sold in small quantities or not at all. B. more than the equilibrium quantity of goods will be sold. C. the equilibrium quantity will be sold, but at a price higher than the equilibrium price. D. the equilibrium quantity will be sold for the equilibrium price.