In events leading to the housing bubble, investment banks on Wall Street made money through the housing market by:
A. buying as many loans as possible to create mortgage-backed securities.
B. offering low interest loans to those with very good credit.
C. relying on banks to sell as few high-risk mortgages as possible.
D. ensuring local banks were making good loans.
Answer: A
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
If the MPS is 0.1 and the income tax rate is 0.33 the marginal leakage rate for a closed economy is
A) 0.033. B) 0.23. C) 0.43. D) 0.397.
If an estimated regression explains none of the variation, R2 will be
A) 0. B) between 0 and 1. C) 1. D) unable to determine with the information given.
You offer an extended warranty for your product that is purchased by a few customers. If the product typically fails 2% of the time,
a. you should price the warranty at less than 2% of the product price b. you should price the warranty at exactly 2% of the product price c. you should price the warranty at more than 2% of the product price d. Cannot tell from this information