A major cause of the Great Recession was:
a. The liberalization of U.S. banking regulations that led to excessive risk taking.
b.Excessive foreign exchange speculation.
c. Contractionary fiscal policies.
d. Excessive money creation by the Federal Reserve immediately before and during the downturn.
e. None of the above.
.A
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Which of the following activities does NOT diversify risk?
A) investing in real estate in various states across the United States. B) writing earthquake insurance policies for the entire Western United States C) writing hurricane insurance policies only in Florida D) purchasing the stock of a variety of different companies
When firms in an illegal market form a cartel, _____
a. they are able to supply higher quality products b. it becomes more difficult for police to detect their activities c. they are able to increase profits by behaving as a monopolist d. they face a deadweight loss e. they rely on goodwill to ensure the stability of the cartel
The demand curve slopes downward because of:
a. diminishing marginal utility and consumer equilibrium. b. the fact that consumers cannot decide how much they want to pay for goods and services. c. the fact that suppliers cannot decide how much to charge for the goods and services they supply. d. the fact that consumer tastes and preferences change rapidly. e. the fact that consumers are fickle, which makes pricing a good or service very difficult.
The nation has its own MPC. When disposable income increases from $300 billion to $400 billion, national consumption increases from $300 billion to $360 billion. At Y = $400 billion, the MPC is:
A. 0.2. B. 0.5. C. 0.6. D. 0.67.