Banks with which type of loans were most likely to fail during the early 1930s?
A) mortgage loans
B) agricultural loans
C) commercial real estate loans
D) international loans
B
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An above full-employment equilibrium is
A) a theoretical possibility but cannot happen in reality. B) the equilibrium in which the economy is in most of the time. C) when real GDP exceeds potential GDP. D) the period of time when prices are falling.
The Volcker disinflation
a. had virtually no impact on output, just as the classical dichotomy suggested. b. was associated with rising output, perhaps due to expansionary fiscal policy. c. caused output to fall, but by less than the typical estimate of the sacrifice ratio suggested. d. None of the above is correct.
To eliminate an AD shortfall of $120 billion when the economy has an MPC of 0.75, the government should decrease taxes by
A. $400 billion. B. $40 billion. C. $120 billion. D. $30 billion.
Based on this graph for the welfare effects of a subsidy, when does the deadweight loss start?
a. when the demand rises above the quantity at E1
b. when the supply rises above the quantity at E1
c. when the supply rises above the quantity at E2
d. when the demand drops below the quantity at E2