Which of the following is a negative real shock that occurred during the Great Depression
What will be an ideal response?
Widespread bank failures led to a reduction in the productivity of financial intermediation.
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A principal cause of the business cycle is the changes in total spending that occur in the overall economy
a. True b. False Indicate whether the statement is true or false
According to the Fisher effect, if the central bank raises the rate of money supply growth, what happens to the nominal and the real interest rate?
An open market purchase by the Fed:
A. increases investment and increases output. B. increases investment and decreases output. C. decreases investment and increases output. D. decreases investment and decreases output.
Consider the stock of ocean tuna which is massively overfished. It is rational for an individual to exploit the resource rather than to conserve the stock because
A) the marginal private benefit of harvesting tuna is lower than the marginal social benefit of harvesting it. B) the marginal private cost of harvesting the fish is lower than the marginal social cost. C) the marginal social cost of harvesting the fish is lower than the marginal private cost. D) the marginal private benefit of harvesting tuna is higher than the marginal social benefit of harvesting it.