The Fed pushed interest rates to artificially low levels during 2002-2004 . The Austrian view predicts that this policy will lead to
a. excessive investment in long-lasting assets like housing that will eventually prove to be unprofitable and result in recession.
b. an increase in sound investments that will propel future economic growth.
c. a reduction in the general level of prices that will throw the economy into a recession.
d. an increase in aggregate demand that will generate sustainable expansion in both real output and employment.
A
You might also like to view...
Refer to Table 4-4. If a minimum wage of $10.50 an hour is mandated, what is the quantity of labor supplied?
A) 400,000 B) 370,000 C) 340,000 D) 60,000
Which does NOT cause an industry that might otherwise be competitive to tend toward oligopoly?
A) economies of scale B) barriers to entry C) mergers D) strategic independence
Holding other factors constant, a decrease in the tax for producing cars causes
a. The supply curve to shift to the left, causing the prices of coffee to rise b. The supply curve to shift to the right, causing the prices of coffee to rise c. The supply curve to shift to the left, causing the prices of coffee to fall d. The supply curve to shift to the right, causing the prices of coffee to fall
The long-run average cost curve is typically:
A. upward-sloping at first but then downward-sloping. B. downward-sloping at first but then upward-sloping. C. always downward-sloping. D. always upward-sloping.