During the financial crisis of 2007–2009, the interest rate spread on mortgage-backed securities over Treasury bills
A. increased tremendously.
B. increased moderately.
C. decreased moderately.
D. decreased tremendously.
Answer: A
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If a polluting producer is forced to pay a pollution charge, what is the effect on the supply and demand curves for the product?
A) The quantity supplied along the firm's supply curve increases. B) The firm's demand curve shifts leftward. C) The firm's supply curve shifts rightward. D) The firm's supply curve shifts leftward. E) Both the supply curve and the demand curve shift leftward.
Tax increases on business income decrease aggregate demand by decreasing
A) business investment spending. B) government spending. C) consumption spending. D) wage rates.
Explain why the price doesn't change when a market is in equilibrium
Some economists argue that increases in government spending are not a likely source of continued inflation because
A) increases in government spending cause reductions in other spending components. B) government spending is not created by the Fed. C) increases in government spending can be financed by money creation. D) a and b E) a and c