When the credit spread rises, an effective policy response might be to ________
A) lower the real interest rate on safe assets
B) prevent the real federal funds rate from falling below zero
C) pursue nonconventional monetary policies to restore the functioning of financial markets
D) announce swift and stern action against those responsible for the financial disruption
C
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Do deficits lead to inflation?
What will be an ideal response?
The following is an example of risk aversion
a. those applying for a well-paid job tend to be unqualified b. more reckless drivers opt for cars with fewer safety devices c. the contractor with the lowest bid for a is the most qualified d. Initial Public Offerings (IPOs) seek investors when prospects look good
Barter requires:
a. that the exchanged goods be portable. b. that the exchanged goods be durable. c. a coincidence of wants. d. that the exchange medium be divisible. e. an effective middleman.
What is the “cost disease of personal services” phenomenon and why does it help explain why tuition rates keep going up so fast?
What will be an ideal response?