AIG almost went bankrupt in 2008 because
A) the value of the securities underlying its credit default swaps declined significantly.
B) it lacked the collateral required by buyers of its credit default swaps.
C) prices of securities underlying their credit default swaps were hard to determine since they were no longer actively traded.
D) all of the above.
D
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A closed economy is one that
A. uses tariffs. B. uses quotas to restrict trade. C. uses exchange controls. D. does not trade with other nations.
An example of "investment" in the national income accounts is the purchase of
A) a new van by a potter, who packs it with his wares and travels to art shows. B) 100 shares of Intel stock on the New York Stock Exchange. C) a 100-year-old house that was just put on the protected historic sites list in the year in question. D) a U.S. government bond.
The initial effect of the 2009 Obama Stimulus Plan upon the federal budget was to
A. eliminate the corporate income tax liabilities of major oil companies. B. increase the federal budget deficit by as much as $750 billion. C. eliminate all opportunities for "logrolling" in the Congress. D. all of the options are correct.
Product differentiation that makes the product better than a rival's product from everyone's perspective
A. makes the rival's product obsolete. B. is known as horizontal differentiation. C. always increases welfare. D. is known as vertical differentiation.