Factors that cause the CPI to exaggerate the inflation rate do not include
a. the tendency of consumers to substitute relatively cheaper goods for those that have become relatively more expensive
b. political pressure from unions and retirees on the Bureau of Labor Statistics to overstate the inflation rate
c. the introduction of new technologies that make it easier to obtain the same standard of living
d. improvements over time on the quality of products
e. the increase in purchases from discount stores
B
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State and local governments rely on ________ as their primary source of tax receipts
A) personal taxes B) contributions for social insurance C) indirect business taxes D) corporate taxes
A person committing to carpool with a friend to the gym for daily workouts is an example of:
A. status quo bias. B. the endowment effect. C. a commitment device. D. positive framing.
Why do banks package loans into securities?
A. To take advantage of tax breaks passed by the federal government as part of stimulus packages. B. The banking regulations require them to do so. C. To spread the risk of default and increase liquidity. D. To get around adhering to current banking regulations.
Which of the following is true about a liquidity trap situation:
a. Quantitative easing might be a more effective strategy to stimulate the economy than buying short term government securities.
b. Quantitative easing may be able to affect long term interest rates even when the Fed is unable to appreciably lower short term interest rates.
c. The Fed cannot easily reduce the fed funds interest rate.
d. All of the above are true.