Thrift institutions encountered serious difficulties in the 1970s because:
a. money market mutual funds became serious competitors for their deposits
b. the U.S. Treasury deposited larger sums of money than the thrift institutions could effectively manage.
c. the interest rates they had to pay on deposits began to fall.
d. each of the largest banks increased the pressure on the thrifts by building a nationwide network of branch banks.
e. the FDIC increased the reserve requirement for thrifts.
a
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How does real gross domestic product (GDP) differ from nominal GDP?
A) Nominal GDP can be used to directly compare the amount of output produced from year to year, while real GDP cannot be used for such comparison. B) Nominal GDP controls for price changes, while real GDP does not. C) Real GDP controls for price changes, while nominal GDP does not. D) There is no difference between nominal GDP and real GDP.
If an increase in the price of a product from $1 to $2 per unit leads to a decrease in the quantity demanded from 100 to 80 units, then according to the averaging equation, the value of price elasticity of demand in absolute terms is
a. 0.33 b. 2.33 c. 0.25 d. 3 e. 0.66
What impact does an increase in the price level in the United States have on net exports and why?
A) An increase in the price level decreases net exports by increasing the relative cost of American goods. B) An increase in the price level increases net exports because higher prices decrease American spending on imports. C) An increase in the price level decreases net exports because higher prices decrease the value of the dollar. D) An increase in the price level increases net exports because higher prices lower the value of the dollar.
If government decides not to charge for access to a highly demanded highway, which of the following is most likely to happen?
a. Government will keep capacity the same. b. Government increase capacity to reduce congestion. c. Government will encourage telecommuting. d. Government will produce an inefficient level of highways to maximize social welfare.