Many borrowers defaulted on subprime mortgages ultimately disrupting financial markets by August 2007. Which of the following is a likely result of this increase in financial frictions?
A) The AD curve likely shifted left which caused a positive inflation gap.
B) The AD curve likely shifted right which caused a positive inflation gap.
C) The AD curve likely shifted left which caused an upward movement along the MP curve to a higher general equilibrium interest rate.
D) The AD curve likely did not shift.
E) none of the above
E
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What will be an ideal response?
By the 1930s, when new technology advanced and craft distinctions blurred, the
a. AFL went out of business b. AFL welcomed nonskilled workers c. AFL restructured d. CIO was formed e. CIO was disbanded
The role of platform firms is to
A. reduce the amount of information in the price system. B. reduce the amount of market competition among sellers. C. lower transaction costs for buyers and sellers. D. reduce the level of voluntary exchanges in markets.
A cartel is
A. a group of consumers that bid against each other for the same product. B. an arbitrator to settle disputes between consumers and producers. C. a government agency that regulates markets. D. a group of producers that agree to set common prices and output quotas.