For the Fed to use money growth as a direct monetary policy target, which of the following needs to exist?
A. A stable link between the monetary base and the quantity of money
B. A highly variable deposit expansion multiplier
C. A predictable link between the quantity of money and the deposit expansion multiplier
D. A stable link between the monetary base and the quantity of money and a predictable relationship between the quantity of money and the rate of inflation
Answer: D
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The transaction demand for money varies
A) directly with the interest rate. B) directly with nominal GDP. C) inversely with nominal GDP only. D) inversely with nominal GDP and real GDP.
In the case of the Ford Pinto, Ford decided that
A) it would be cheaper to pay damages to families involved in crashes than to fix the problems with the Pinto. B) it would be more expensive to pay damages to families involved in crashes than to fix the problems with the Pinto. C) the problems with the Pinto could not be easily or cheaply fixed. D) it would not be held liable for damages caused by the Pinto and therefore had no reason to fix them.
The answer is, "They are mortgage loans granted to persons who might have low credit ratings." The question is:
A) What are traditional loans? B) What are collateralized debt obligations? C) What are subprime mortgage loans? D) What are securitized loans?
(1)(2)(3)(4)(5)QdQdPriceQsQs5040$1070806050960708060850609070740501008063040Refer to the above table. In relation to column (3), a change from column (2) to column (1) would indicate a(n):
A. decrease in demand. B. increase in supply. C. decrease in supply. D. increase in demand.