Which of the following contributed to the soaring housing prices during 2002-2004?
A) the Fed's low-interest rate policy
B) the increasing popularity of fixed-rate, long-term loans to lock in low interest rates
C) the Fed's high-interest rate policy
D) the tightening of loan standards by commercial lenders
A) the Fed's low-interest rate policy
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Arguing that economic growth will eventually stop because we will run out of natural resources:
A. ignores the power of markets to recognize shortages and induce changes in behavior. B. must be correct because scarcity exists. C. is supported today by the fact that richer countries have fewer natural resources. D. will only be correct if growth takes the form of newer, more efficient goods and services.
A $100 million decrease in government expenditure on goods and services leads to an even larger decrease in aggregate demand because of
A) induced changes in consumption expenditures. B) automatic fiscal policy. C) induced changes in aggregate supply. D) discretionary fiscal policy. E) the reinforcing effect of monetary policy.
Subsidiarity requires nations to give up some of their national sovereignty
Indicate whether the statement is true or false
Which of the following will be counted as an expenditure in the measurement of GDP? (Assume that none of the transactions is concealed from the relevant authorities.)
A) the value of a used automobile that remains unsold on the dealer's lot B) purchase of a lamp at a neighborhood garage sale C) purchase, using foodstamps, of a loaf of bread D) payment by a parent to her child for doing household laundry E) purchase of flour by a bakery