Recall the Application about the Fed's response to the collapse of the investment house Bear Stearns as well as its handling of the 2008 financial crisis with respect to other financial institutions to answer the following question(s). According to the Application, in response to the financial crisis, the Fed implemented a new policy in which it began to pay interest on deposits held at the Fed. This move would ________ deposits held at the Fed and ________ the Fed's ability to make loans.
A. decrease; decrease
B. decrease; increase
C. increase; decrease
D. increase; increase
Answer: D
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What will be an ideal response?
A counterfactual is
A. what happens when there are no facts. B. what would have happened if the treatment group had not received the treatment. C. a legal term describing the process of proving that a negative is the actual truth. D. none of these answer options are correct.
An oligopolist charges a lower price than the short-run profit-maximizing price. How does this affect the firm’s allocative efficiency?
a. The firm achieves allocative efficiency because P 1 exceeds MC.
b. The firm fails at allocative efficiency because P 1 is less than the minimum ATC.
c. The firm fails at allocative efficiency because P 1 exceeds MC.
d. The firm achieves allocative efficiency because P 1 is less than MC.
What is an increasing cost industry?
What will be an ideal response?