The analysis of Chapter 15 argues that the painfully slow recovery following the Great Recession, in which the accumulation of mistakes during the housing bubble are not being fully corrected, is explained by
A) the Fed's continued attempt to keep interest rates low and "help" the housing sector recover.
B) the negative consequences of deficit policies that attempt to "stimulate" the economy.
C) both of the above reasons.
D) neither of the above reasons.
C
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The Fed tends not to use discount policy as its principal tool in influencing the money supply since
A) discount loans do not affect the money supply. B) it does not have as much control over discount loans as it has on open market operations. C) it is prohibited from doing so by an act of Congress. D) it prefers to use reserve requirements.
The primary additional insight provided by expanding the theory of demand from two to three goods is that a pair of goods may now be:
a. gross substitutes. b. gross complements. c. net substitutes. d. net complements.
Which of the following would raise both the equilibrium price and the equilibrium quantity of strawberries?
A. A decrease in the demand for strawberries. B. An increase in the demand for strawberries. C. A decrease in the supply of strawberries. D. An increase in the supply of strawberries.
Table 9.1Disposable IncomeTotal Consumption(Billions of dollars per year)(Billions of dollars per year)$0$50200210At which income level does consumption equal income according to the information provided in Table 9.1?
A. $150 billion. B. $600 billion. C. $250 billion. D. $900 billion.