Banks in the U.S
A) are prevented from holding assets that are "too risky."
B) are not prevented from holding assets that are "too risky."
C) are encouraged not to hold assets that are "too risky."
D) are not encouraged not to hold assets that are "too risky."
E) are encouraged to lend to a single private customer.
A
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Describe an asset price bubble and give examples. Explain why it is extremely difficult if not impossible for the Federal Reserve to prevent such bubbles
The market value of a good or service is the:
A. price at which producers are willing to sell an output. B. government's valuation using the CPI. C. price at which it is bought and sold. D. None of these statements is true.
Given the consumption function C = $500 billion + 0.80Y, an increase in disposable income from $6,000 billion to $7,000 billion will cause consumption to increase by:
A. $800 billion. B. $1,000 billion. C. $1,300 billion. D. $1,500 billion.
A purely competitive firm:
A. must earn a normal profit in the short run. B. cannot earn economic profit in the long run. C. may realize either economic profit or losses in the long run. D. cannot earn economic profit in the short run.