If the money supply in the economy were at MS3, to engage in expansionary policy the Federal Reserve Bank would use open market operation to move money supply to:
A. MS1
B. MS2
C. MS4
D. it would stay at MS3
C. MS4
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Prices and wages are considered "sticky" if
A) their rates of increase and decrease are identical. B) as prices increase, wages increase by the same percentage. C) their rates of change are directly connected to the rate of change in unemployment. D) they do not fully adjust to changes in demand and supply.
The largest component of GDP is
Which of the following is not the case when social costs are greater than private costs?
A. There is market failure. B. Resources are allocated efficiently. C. External costs exist. D. The market's price signals are flawed.
One of the most significant factors causing the recession of 2007-2009 was
A. very low interest rates maintained by the Federal Reserve. B. the bursting of the housing bubble. C. the huge federal government budget surplus. D. very low, crude oil prices.