In events leading to the housing bubble, investment banks on Wall Street made money through the housing market by:
A. buying as many loans as possible to create mortgage-backed securities.
B. relying on banks to sell as few high-risk mortgages as possible.
C. ensuring local banks were making good loans.
D. offering low interest loans to those with very good credit.
A. buying as many loans as possible to create mortgage-backed securities.
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If more foreign tourists visited the United States, this would
A. lower our merchandise trade imbalance. B. lower our overall trade imbalance. C. raise our merchandise trade imbalance. D. raise our overall trade imbalance.
When the Fed uses monetary policy targets, they cannot use both a money supply target and an interest rate target at the same time because
A. It is easier for the Fed to keep track of, and influence, the interest rate B. Interest rates are determined by money supply and money demand that the Fed does not control money demand C. The Fed is only allowed to choose one target at a time to publish the Congress
A study showing that eating ranch salad dressing might be harmful to one’s health slightly reduces the demand for the product. However, a new bottling method greatly increases the production of this dressing. Considering this, the equilibrium quantity of this dressing would ______.
a. decrease b. increase c. remain constant d. be indeterminate
How would a new excise tax affect the supply curve?
(A) It would probably cause the supply curve to shift to the left. (B) It would probably cause the supply curve to shift to the right. (C) The effect cannot be determined without knowing the amount of the tax. (D) It would not change the supply curve, because it would only move price.