The government can deal with the effects of the decline in wealth, without causing new problems down the road.
Answer the following statement true (T) or false (F)
False
The government will attempt to hold up financial asset prices to remedy the decline in wealth, and as a result, they will create a moral hazard problem, where people are not really held accountable for their actions. This could lead to another asset bubble in the future.
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Business managers are people who:
A. run businesses on a day-to-day basis. B. entertain the workers. C. engage exclusively in business travel. D. own the physical capital used in production.
Kelly works at an ice cream shop and observes that the number of people buying ice cream varies greatly from day to day. For a couple of weeks she has recorded the number of people at the shop each day, as well as the daily temperature. If Kelly is using
the scientific method to better understand ice cream buying habits, her next step is to: A. conclude definitively that people buy more ice cream when the temperature rises. B. state her findings as a well-tested economic principle. C. use the observed data to form a hypothesis about ice cream buying behavior. D. throw out the data if it does not show a perfect relationship between buying habits and the other information she has collected.
Which of the following games involving the roll of a single die is a fair bet?
A) Bet $1 and receive $1 if 3 or 4 comes up. B) Bet $1 and receive $1 if 3, 4, or 5 comes up. C) Bet $1 and receive $4 if 6 comes up. D) None of the bets is a fair bet.
A decrease in aggregate demand results in a(n) ________ in the ________
A) recession; long run B) expansion; long run C) expansion; short run D) recession; short run