What are the lessons from the crisis for monetary policy?
What will be an ideal response?
Liquidity trap has led a number of countries to explore unconventional monetary policy tools, such as QE. The crisis has shown that stable inflation is not a sufficient condition for macroeconomic stability. This is leading central banks to explore the use of macro prudential tools.
You might also like to view...
A baseball player who is currently batting .350 will increase his batting average on a day that he goes _____ at the plate
a. 1 for 4. b. 1 for 3. c. 2 for 5. d. 2 for 6.
Pharmaceutical development provides a good example of rent-seeking behavior, the pursuit of which results in _______.
a. lower economic activity by diverting resource to less-productive uses b. lower prices throughout the economy c. increased economic activity by promoting efficiency d. a more equitable distribution of income and wealth e. greater income and wealth in the private sector
Refer to the figure above. The economy is at equilibrium at point B. What would expansionary fiscal policy do?
a. Move the economy from point B upward along AD2 b. Move the economy from point B towards point C c. Move the economy from point B downward along AD2 d. Move the economy from point B towards point A
Bob and Bill can make 16 toys each if they devote 8 working hours in a day. Further, Bob can repair 4 cars and Bill can repair 2 cars, if they devote 8 working hours in a day. What is the opportunity cost of repairing one car to Bob?
a. 10 toys b. 8 toys c. 16 toys d. 12 toys e. 4 toys