Keynes argued that because of sticky prices and wages
A. the long-run aggregate supply curve slopes downward.
B. the short-run aggregate supply curve is probably vertical.
C. the short-run aggregate supply curve could be horizontal.
D. the aggregate demand curve is vertical.
Answer: C
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Most of the TARP funds were used to
A) fund a stimulus package. B) pay for losses incurred by Fannie Mae and Freddie Mac. C) finance the operations of the Federal Reserve. D) make direct purchases of preferred stock in banks to increase their capital.
Even a bank in good financial health can fail if there is a run on the bank
a. True b. False
If an increase in the price of good X leads to a decrease in the consumption of good Y, then goods X and Y are called
A. normal goods. B. complements. C. substitutes. D. inferior goods.
In the United States, the good or service given the most weight in the CPI basket when calculating the CPI is
A) food and beverages. B) taxes. C) medical care. D) housing. E) recreation.