The repurchase agreement market dried up during the Great Recession because:
a. Counterparty risk increased, which caused normal lending channels to fail and lines of business to shrink.
b.The collateral backing these agreements fell in value, causing large massive calls for additional collateral.
c. Many participants were uncertain about the value of the securities backing these agreements.
d. All of the above.
.D
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A comparative advantage is the ability of one person or nation to produce a good at an opportunity cost that is lower than that of another person or nation
Indicate whether the statement is true or false
Potential GDP per labor hour can increase due to
A) increases in labor productivity. B) increases in the quantity of money. C) increases in population. D) decreases in the quantity of capital.
The purpose of functional finance is to
A. decrease deficits through monetary policy. B. use fiscal policy to keep aggregate demand at the desired level, regardless of the impact on deficits. C. tax corporate income first at the corporate level, and then again when it is distributed to shareholders. D. use monetary policy to keep deficits stable over time.
Refer to the above figure. Point B is known as
A) a peak. B) a recession. C) an expansion. D) a contraction.