List the various reasons that contributed to the financial crisis that occurred in 2008
Low interest rates from 2002 to 2004 caused excessive borrowing. Deregulation in the mortgage industry and lower standards by Fannie Mae and Freddy Mac led to the significant amount of sub-prime mortgages to borrowers who could not afford to make payments when interest rates increased in 2006 . With limited down payments and decreasing home values, some owners walked away from their homes leading to more foreclosures and a further decline in the housing market. These mortgages were then bundled and sold to investors; this leveraging concentrated the risk which was not rated correctly by agencies like Moody's and S&P.
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Describe the changes in the variables that will cause the demand for a product to decrease, shifting the demand curve to the left
What will be an ideal response?
If real GDP exceeds aggregate planned expenditure, then the change in unplanned inventories is ________ and firms ________ production
A) negative; decrease B) positive; increase C) zero; do not change D) negative; increase E) positive; decrease
If a nation imports a good that can be domestically produced, what happens to the quantity consumed of the good and why?
A) The quantity consumed increases because the market price increases. B) The quantity consumed increases because the market price decreases. C) The quantity consumed remains constant because the price is unchanged. D) The quantity consumed decreases because the market price increases. E) The quantity consumed decreases because the market price decreases.
A tariff on a particular good does which of the following? a. It increases the net-of-tariff price received by foreign producers
b. It increases the price of the good to domestic consumers. c. It redistributes income away from domestic producers toward domestic consumers. d. none of the above