Why did the Fed step in to organize a rescue for Long Term Capital Management (LTCM) in September, 1998, rather than simply letting the trouble fund fail? Was the Fed's action necessary or advisable?
What will be an ideal response?
To avoid what the Fed perceived as a possible meltdown of international banking caused by the crisis in Russia and when Asia and Latin American economies were already facing a steep economic slowdown. The problem is moral hazard.
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If the demand curve for a good is a vertical line at Q = 1, then a decrease in the price of that good will:
A. decrease the quantity demanded. B. lead the quantity demanded to fall to zero. C. increase the quantity demanded. D. not change the quantity demanded.
Approximately what percentage of the world population experiences scarcity?
A) 33% B) 50% C) 66% D) 100%
Rapid economic growth tends to increase the degree of income mobility
Indicate whether the statement is true or false
The marginal propensity to consume plus the marginal propensity to invest equal one
Indicate whether the statement is true or false