How did the global supply of savings impact the formation of the housing bubble?
What will be an ideal response?
Interest rates were lower and demand for housing higher than it would have been otherwise.
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
Suppose a bank has $100 million in checking account deposits with no excess reserves and the required reserve ratio is 10 percent. If the Federal Reserve reduces the required reserve ratio to 8 percent, then the bank can make a maximum loan of
A) $0. B) $2 million. C) $8 million. D) $10 million.
Refer to Scenario 16.2. What is Sally's marginal rate of substitution of tee shirts for candy at the current distribution?
A) 7/2. B) 2 C) 1/2. D) It is impossible to determine without the prices of each commodity.
Assume that you have just returned to the United States from a summer vacation in Russia, where you exchanged American dollars for Russian rubles. Your economic actions can be said to have:
a. increased the supply of American dollars in Russia. b. decreased the supply of Russian rubles in America. c. decreased the supply of American dollars in Russia. d. increased the demand for American dollars in America. e. increased the supply of Russian rubles in Russia.