The so-called too-big-to-fail policy has two conflicting sides: on one hand there's the moral hazard problem that it creates, but in the other hand the Fed must:
A. Protect the stability of the banking system
B. Promote competition among banks
C. Ensure the employment of people in financial services
D. Control the money supply
A. Protect the stability of the banking system
You might also like to view...
In the first calendar quarter a company issues a surprising report saying that it expects profits to rise in the fourth quarter. The theory of efficient markets says we should expect the price of the company's stock to:
A. rise around the third quarter since this information will take time to disseminate. B. rise immediately on the expectation of higher profits in the future. C. fall immediately as stockholders will be disappointed about having to wait until the fourth quarter for higher profits. D. rise in the fourth quarter when the higher profits are actually seen.
What are the marginal propensity to consume (MPC) and the marginal propensity to save (MPS)? How is the MPC related to the consumption function?
What will be an ideal response?
Which of the following industries is best characterized as monopolistically competitive?
A. Cereal B. Local electricity service C. Crude oil D. Wheat
The benefits of economic growth are ________, while the costs of economic growth are ________.
A. increased output per person; too small for concern B. more current consumption; less future consumption C. increased output per person; less future consumption D. increased output per person; the consumption sacrificed in exchange for capital formation