The effect of crowding out over the long run is
A. bad because it is deflationary in nature.
B. bad because businesses have less access to loans.
C. good because it ensures strong businesses.
D. good because it tends to reduce taxes.
Answer: B
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The expectations hypothesis assumes each of the following, except:
A. bonds of different maturities are perfect substitutes. B. bonds of different maturities are not perfect substitutes. C. bonds of different maturities have the same risk characteristics. D. long-term bond rates are equal to the average of current and expected future short-term interest rates.
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
When economists say that mortgages are "securitized" what do they mean by this description?
What will be an ideal response?
In the context of a controlled experiment, consider the simple linear regression formulation = 0 + 1 + . Let the be the outcome, the treatment level, and contain all the additional determinants of the outcome. Then:
A) the OLS estimator of the slope will be inconsistent in the case of a randomly assigned Xi since there are omitted variables present. B) Xi and ui will be independently distributed if the Xi be are randomly assigned. C) β0 represents the causal effect of X on Y when X is zero. D) E(Y X = 0) is the expected value for the treatment group.