Mortgage-backed securities are:
A. investments that people bought based on the equity of their homes.
B. tradable assets made up of packages of individual mortgages.
C. assets that were purchased based on the leveraged value of people's homes.
D. securities that are often purchased by homeowners.
Answer: B
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Frequently, a public good can be adequately provided by private action when its benefits are
a. concentrated among a small number of people. b. equally valued by everyone. c. widespread. d. greater than its costs.
An increase in the number of people in the United States with health insurance could cause the cost of providing health care services to increase as the incentive for health care providers to minimize costs decreases
Indicate whether the statement is true or false
Gordon recommends that government macroeconomic policymakers focus on
A) reducing inflation to zero. B) creating a national job finding service to reduce frictional unemployment to near zero. C) creating "enterprise zones" to move jobs to areas of concentrated unemployment. D) programs to match more closely the job skills of the unemployed to those of job vacancies.
Which of the following best describes a policy of inflation targeting?
A) It's an inflexible rule that requires the central bank to always achieve a specified inflation rate. B) It allows monetary policy to focus on inflation and inflation forecasts except in the case of severe recession. C) It allows the central bank the flexibility of setting different inflation targets each year. D) It requires central banks to target current inflation rather than inflation forecasts.