Answer the following statements true (T) or false (F)
1. The zero interest rate policy (ZIRP) presented a policy problem when the economy remained weak, and that problem is known as the zero bound problem.
2. Quantitative easing (QE) differs from open-market purchases in that QE shrank the assets of the Fed whereas open market purchases expands the Fed's assets.
3. The effects on aggregate demand of an open market purchase and a tax cut are similar.
1. True
2. False
3. TRue
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Unemployment compensation programs tend to increase the unemployment rate because: a. they increase the opportunity cost of leisure
b. they provide benefits only to unemployed people under the age of 18. c. they legally fix the minimum wage that has to be paid to labor. d. they allow unemployed persons to become more selective in what job offer they accept. e. they do not provide benefits to labor engaged in the manufacturing sectors of the economy.
If a competitive industry is neither expanding nor contracting, we would expect:
A. total revenue to be zero. B. economic profits to be zero. C. total opportunity cost to be zero. D. more resources to flow to that industry.
Which of the following statements best describes the Internet market structure?
A. It is highly competitive, with many providers and no firms in a dominant position. B. There are a few large firms, such as Google, Facebook, and Amazon, but they each occupy their own niche and don't infringe on the others' territories. C. There are a few large firms, such as Google, Facebook, and Amazon, each dominating a particular sector but always trying to gain market share in another sector. D. It is comprised of firms that have been granted monopolies by the government and are highly regulated.
Adverse selection refers to the
A. possibility that the borrower may engage in riskier behavior after the loan is obtained. B. use of statistical discrimination in making loans. C. possession of information by one party in a financial transaction not known by the other party. D. likelihood that a potential borrower may use the funds that he receives for unworthy, high risk projects.