Regulatory policies requiring lenders to extend more low down-payment loans to higher-risk borrowers along with the Fed's low short-term interest rate policy during 2002-2004 caused
A) housing prices to fall during that period.
B) mal-investment, that is, excessive investment in housing construction during 2002-2005.
C) a subsequent increase in interest rates that led to a housing boom.
D) a reduction in housing construction during 2002-2005.
B) mal-investment, that is, excessive investment in housing construction during 2002-2005.
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Income inequality in the United States has increased somewhat over the past 25 years. Two factors that appear to have contributed to this are
A) rapid technological change and expanding international trade. B) strong economic growth and low inflation. C) tax cuts on high-income individuals and large increases in prices of stocks. D) outsourcing of jobs by U.S. firms and cuts in taxes on capital gains.
In the United States during the late 1970s, the nominal interest rates were quite high, but the real interest rates were negative. From the Fisher equation, we can conclude that expected inflation in the United States during this period was
A) irrelevant. B) low. C) negative. D) high.
Monopoly rights provided by patents are awarded to
a. encourage profit making b. guarantee competitive prices c. encourage competition d. the "first come, first served" e. encourage research and development
One World View table titled "Union Membership" shows the unionization rates for several countries including the United States. The decline in the U.S. unionization rate is the result of
A. The decline in worldwide competition. B. A relative decline in service industries. C. The growth of large firms relative to small firms. D. A relative decline in manufacturing.