Monetarists would likely argue that the severe recession of 2007-2009 was primarily caused by
A. too much deregulation of the financial sector in previous years.
B. excessive money supply creating a bubble in some sectors of the economy.
C. wide swings in investment expenditures driving erratic fluctuations in aggregate demand.
D. adverse aggregate-supply shocks causing tremendous unemployment.
Answer: B
You might also like to view...
If a tariff is imposed on imports of shrimp into the United States, U.S. producers ________ and the U.S. economy will ________
A) gain; be unaffected B) gain; lose C) lose; lose D) gain; gain E) lose; gain
Some economists and policymakers criticized the Fed for taking too much time understanding and identifying the problems in financial markets which led to the financial crisis of 2007-2009
This criticism best describes the ________ as a limitation of monetary policy. A) implementation lag B) recognition lag C) impact lag D) asymmetry lag
If an increase in marginal tax rates leads to an increase in tax revenues, then
a. the Laffer curve model of tax revenue is refuted. b. supply-side economics is refuted. c. the economy could be below the tax revenue maximizing tax rate. d. we could be on the upward sloping portion of the Laffer curve.
The price elasticity of demand coefficient for a good will be greater:
a. if close substitutes exist. b. if minor complements exist. c. in the short-run. d. if a small portion of the budget will be spent on it.