The economy suffered a mild recession in 2001. Despite the recession, home sales and durable goods sales remained high. Which of the following is a plausible explanation?
A) The Fed's pursuit of contractionary policy stimulated these markets.
B) The Fed caused a reduction in the federal funds rate to its lowest level in 40 years.
C) Home building and consumer durable purchases are always high during a recession.
D) Rising inflation encouraged many to invest in the real estate market.
B
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Which of the following is an example of a non-price provision in an automobile insurance contract that can reduce moral hazard?
a. A provision specifying that coverage is limited to 75 percent of the total damages caused by an accident. b. A provision that disallows medical claims by drunk drivers involved in accidents. c. A provision that restricts accident compensation to claims over $1,000. d. A provision requiring that the insured car carry certain safety devices like air bags.
A general mismatch between the skills of unemployed workers and the skills needed by employers with job openings results in
a. frictional unemployment. b. structural unemployment. c. cyclical unemployment. d. a higher labor force participation rate.
A rising price level should shift the expenditure schedule
A. upward and decrease equilibrium real GDP. B. downward and increase equilibrium real GDP. C. downward and decrease equilibrium real GDP. D. upward and increase equilibrium real GDP.
If a country is currently producing at a production point such that the trade line has a slope that is flatter than the slope of the PPC at the same point, then
A) the country can get greater gains from trade if it moves production away from the good on the vertical axis. B) the country can get greater gains from trade if it moves production toward the good on the vertical axis. C) the country cannot improve on its gains from trade. D) There are no gains from trade in this example.