When buyers assume that there is a 70% chance of getting a lemon, and seven lemons (low quality) and three plums (high quality) are supplied, there is an equilibrium.
Answer the following statement true (T) or false (F)
True
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What is TRUE when the credit market is in equilibrium?
A) The legal minimum wage equals the actual wage. B) Desired saving equals desired investment. C) Desired employment equals the number of jobs available. D) Desired consumption spending equals the total of saving plus investment.
A fall in the price level produces a ________ the aggregate supply curve
A) rightward shift of B) movement upward along C) rightward shift of the aggregate supply curve and a movement downward along D) movement downward along E) leftward shift of
Compared to the past, FOMC meetings are now much more transparent. How might this transparency impact the effectiveness of monetary policy actions?
A) The transparency helps make the Fed's actions more credible and should help make policy actions more effective. B) The transparency undermines the effectiveness since financial markets can more quickly adjust their behavior to fight the policy actions. C) The transparency counteracts the secrecy in which fiscal policy is enacted, and therefore decreases its effectiveness. D) The transparency lengthens policy lags, so monetary policy takes longer to implement and take effect.
Usury laws impose a _________ on interest rates.
Fill in the blank(s) with the appropriate word(s).