When the housing bubble popped, the effect of the negative demand side shock and the negative supply side shock were the same on:
A. output, causing it to definitely decrease.
B. prices, causing them to definitely rise.
C. output, causing it to definitely increase.
D. prices, causing them to definitely fall.
Answer: A
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Adjustable rate mortgages
A) reduce the interest-rate risk for financial institutions. B) benefit homeowners when interest rates rise. C) generally have higher initial interest rates than conventional fixed-rate mortgages. D) allow borrowers to avoid paying interest on portions of their mortgage loans.
That the money form should be homogeneous is another way of saying that all units of money should be
a. durable b. portable c. stable d. identical e. divisible
On January 1, 2006, a consumer borrowed $10,000 for a term of one year at an interest rate of 12 percent. How much principal and interest will the consumer pay back on January 1, 2007?
A. $10,000 B. $1,200 C. $8,929 D. $11,200
By law, the Federal Reserve is barred from
A. raising the reserve ratio to 20%. B. lowering the discount rate to 2%. C. selling more than $5 billion in United States government securities during any month. D. buying more than $5 billion in United States government securities during any month.