Why did the monetary base increase rapidly during the economic crisis of 2008?
a. The Fed sold financial assets and extended fewer loans.
b. The Fed increased both its purchase of assets and quantity of loans extended.
c. The Fed increased its purchases of assets, but offset this with an increase in the reserve requirement.
d. The Fed sold financial assets, but offset this with a reduction in the reserve requirement.
B
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How can the Federal Reserve, by expanding the money supply and lowering interest rates, alleviate a recession?
What will be an ideal response?
Which of the following statements about bank loans is correct?
a. Banks are allowed to make loans to businesses, individuals, but not make loans to other banks or invest in the stock market. b. Banks are allowed to make loans to businesses, individuals, and other banks, but not invest in the stock market. c. Banks are allowed to make loans to businesses, individuals, and invest in the stock market, but not make loans to other banks. d. Banks are allowed to make loans to businesses, individuals, other banks, and invest in the stock market.
The GDP of the U.S. in 2014 was around $17.4 trillion. This means
A. that total income in the U.S. in 2014 was around $17.4 trillion. B. that total spending on final goods and services in the U.S. in 2014 was around $17.4 trillion. C. that the value of output in the U.S. in 2014 was around $17.4 trillion. D. all of the above.
A dominant strategy exists if:
A. both players have the highest payoff when they make the same choice. B. a player has a strategy that yields the highest payoff regardless of the other player's choice. C. both players make the same choice. D. one strategy yields the highest possible payoff.