In 2008, commercial banks' share of the U.S. credit market changed as a result of
A) commercial banks that experienced significant difficulties resulting from real estate investments applied for status as investment banks.
B) investment banks that experienced significant difficulties resulting from real estate investments applied for status as commercial banks.
C) increasing returns on real estate investments led commercial banks to expand.
D) increasing returns on real estate investments led investment banks to expand.
Ans: B) investment banks that experienced significant difficulties resulting from real estate investments applied for status as commercial banks.
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If the marginal propensity to save (MPS) increases, the multiplier
A) decreases. B) can either increase or decrease, depending on what happens to the marginal propensity to consume (MPC). C) increases. D) stays the same.
The social cost of a good or service includes the producer's private cost and all the external costs
Indicate whether the statement is true or false
In the Taylor rule, does the target for the federal funds rate respond differently for a recession caused by a decrease in aggregate demand and for a recession caused by a decrease in short-run aggregate supply? Explain whether there is or is not a
difference in how the target for the federal funds rate changes.
There is a technological improvement in the production of good X. As a result, the _____________ curve for good X will shift ____________ resulting in a(n) _____________ in the equilibrium price of X and a(n) ____________ in the equilibrium quantity of X
A) supply; rightward; decrease; increase. B) demand; leftward; decrease; decrease C) demand; rightward; increase; increase D) supply; leftward; increase; decrease E) supply; leftward; increase; increase