The 2008 credit crunch occurred when banks reduced lending in response to
a. the loss of asset value for mortgage backed securities and mortgage loans.
b. having too little capital to satisfy capital requirements
c. an excess of bank capital.
d. an increase in the required reserve ratio.
a
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If Ap is total autonomous planned spending, c is the marginal propensity to consume, s is the marginal propensity to save, and Y is the equilibrium income level, then induced saving is
A) Ap/Y. B) Y = Ap/s. C) sY. D) cAp.
What happens to aggregate supply when production costs adjust completely to price increases?
a. Both equilibrium output and prices increase b. Only prices rise; equilibrium output remains fixed c. Only equilibrium output rises; equilibrium prices remain fixed d. Equilibrium output falls while prices rise e. Both equilibrium output and prices remain fixed
According to the analysis of the short run and long run Phillips curves in the text, a persistent inflation rate of 10% per year: a. Would keep unemployment below the natural rate
b. Would keep unemployment above the natural rate. c. Would result in unemployment at the natural rate of unemployment. d. Is consistent with any of the above scenarios.
Which regulatory commission helps legislators write command-and-control policies?
a. CAB b. FTC c. EPA d. FDA