The movement away from bank lending towards asset-backed securities:
A. has eliminated the bank-lending channel as a mechanism for monetary policy.
B. has not affected the importance of the bank-lending channel.
C. has increased the importance of the bank-lending channel of monetary policy.
D. will require the FOMC to rethink the quantitative impact of changing the target federal funds rate.
Answer: D
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Long-run cost functions are estimated using
A) time-series regression analysis. B) cross-sectional regression analysis. C) cost accounting data. D) None of the above
Which of the following financial market developments has helped to remove financial constraints faced by people?
a. Online stock trading b. Bank credit cards c. Derivatives trading d. ATM/Debit cards
A concern about crowding out caused by increased government borrowing is that:
A. interest rates on private borrowing fall. B. lower rates of economic growth can result from a decline in business investment spending. C. the federal government may default on its loans. D. foreign lenders find it less attractive to help finance federal deficits.
While you and your roommate are eating your nightly Hamburger Helper meal, your roommate says "I'll never eat Hamburger Helper again once I graduate and start making some real money!" In your roommate's eyes, Hamburger Helper is currently
A) a normal good. B) an inferior good. C) a bad. D) a waste of his money.