During the 2008/09 recession, the Fed bailed out 25 percent of banks to keep them solvent.
Answer the following statement true (T) or false (F)
False
The Fed's major contribution was to create liquidity, not bail out banks.
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If an economy is at equilibrium, it will also be operating at full employment
a. True b. False
Which of the following is not a problem associated with barter?
a) tax rates are generally higher on barter than on monetary transactions b) the quality of goods used in barter may differ across time and place c) transporting goods for use in barter is inconvenient d) goods used in barter may not be easily divisible e) barter requires a double coincidence of wants
In order for a price ceiling to have an effect on the market, must it be set above or below the equilibrium price? Why?
What will be an ideal response?
When the Phillips curve was viewed as a structural relationship, it was believed that the Fed could
A) permanently reduce the unemployment rate if it were willing to accept an increase in the inflation rate. B) permanently reduce the inflation rate as it permanently reduced the unemployment rate. C) permanently reduce the unemployment rate if it were willing to increase the real interest rate. D) permanently reduce the inflation rate if it were willing to decrease the real interest rate.