The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending.
B. recessionary gaps.
C. expansionary gaps.
D. unemployment.
Answer: B
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As a result of the financial crisis of 2007-2009, the size of the shadow banking system:
A) became smaller than the commercial banking system B) became larger than the commercial banking system C) declined, but remained larger than the commercial banking system D) increased, but remained smaller than the commercial banking system
Less developed countries are often characterized by imperfect capital markets. Assuming that the LCH applies to these countries and that a large proportion of the population is below fifty the
A) MPC should be relatively high. B) MPC should be relatively low. C) frequency of liquidity constraints is low. D) sensitivity of consumption to loans is low.
The demand for Olin skis is likely to be
a. less elastic than the demand for skis in general b. more elastic than the demand for skis in general c. unit elastic relative to the demand for skis in general d. as elastic as the demand for skis in general e. greater than the demand for skis in general
Which of the following statements is false?
A) People who live in cities with good weather receive that benefit for free. B) People who own property in cities with good weather receive higher rents, ceteris paribus. C) Housing prices are higher in cities with better weather, ceteris paribus. D) The demand for housing is higher in cities with good weather, ceteris paribus.