During the turmoil in the market for subprime mortgages in 2007 and 2008, the Fed increased the volume of discount loans. The goal of the Fed was to
A) reduce the rate of inflation.
B) stimulate economic growth.
C) reduce unemployment.
D) reassure financial markets and promote financial stability.
E) reduce the current account deficit.
Answer: D
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Suppose that the price elasticity of demand for snow shovels is –1.2 . What would have to happen to the price of a snow shovel for the quantity demanded to fall from 2,000 to 1,800? Use the midpoint formula in your calculations
What will be an ideal response?
Interest rates in the economy have fallen. How will this affect aggregate demand and equilibrium in the short run?
A) Aggregate demand will fall, the equilibrium price level will rise, and the equilibrium level of GDP will fall. B) Aggregate demand will fall, the equilibrium price level will fall, and the equilibrium level of GDP will fall. C) Aggregate demand will rise, the equilibrium price level will fall, and the equilibrium level of GDP will rise. D) Aggregate demand will rise, the equilibrium price level will rise, and the equilibrium level of GDP will rise.
A monopolist has a marginal revenue curve given by MR = 102 - Q, and a total cost curve given by TC = Q2 + 16. The monopolist's profit maximizing price and quantity are ________, ________ respectively.
A. 85; 34 B. 52; 50 C. 77; 50 D. 100; 2
At an output of 12, ATC is $12 and price is $9. At an output of 13, ATC is $12.40 and price is $9. MC = MR at an output of 12.6. At that output the firm will
A. take a loss. B. break-even. C. make a profit.