Which of the following happened as a result of the global financial crisis caused when several types of unregulated financial assets failed late in 2007?
a. Housing prices ballooned to unprecedented levels.
b. The Great Depression began.
c. Certain financial institutions had to be taken over by the government.
d. The Dodd-Frank Act was repealed.
c. Certain financial institutions had to be taken over by the government.
The Great Recession began late in 2007 and was caused at least in part by a global financial crisis, which began in the United States. The key component was the creation and subsequent failure of several types of unregulated financial assets, which led to the failure of Lehman Brothers, a major investment bank, numerous large commercial banks, such as Wachovia, and even the Federal National Mortgage Corporation (Fannie Mae), which had to be nationalized—that is, taken over by the federal government. One response to the financial crisis was the Dodd-Frank Act, which attempted major reforms of the financial system.
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The three ways of reducing a government budget deficit are to
A) decrease government spending, reduce consumption, increase the tax rate. B) increase government spending, decrease real income, reduce the tax rate. C) decrease government spending, increase real income, reduce the tax rate. D) decrease government spending, increase real income, increase the tax rate.
The most direct opportunity cost of having large families in an LDC such as Egypt is the
a. loss of its customs and traditions b. benefit of having more hands to help on the farm c. larger tax revenues government collects from families d. sacrifice of per capita material goods and services e. political instability generated by population size
Congress just received a report that the economy began a downturn five months ago. They vote to implement an expansionary policy to address it, but they are already five months too late to completely stop the damage. This is an example of ______.
a. an impact lad b. a crowding-out lag c. a recognition lag d. an implementation lag
If the Bank of Japan permanently increases its money supply, then which of the following is most likely to take place in the short run?
a. Japanese prices will immediately decrease. b. Japanese prices will immediately increase. c. Japanese interest rates will increase. d. Japanese interest rates will decrease.