Liquidity provision and asset purchase may not be enough to stimulate the economy unless the these policy actions are able to
A) lower the real interest rate for investments.
B) lower the short-term real interest rate.
C) raise the policy rate above zero.
D) lower the policy rate.
A
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The cyclically adjusted budget deficit calculates the budget surplus or deficit at
A) potential GDP. B) average GDP. C) real GDP. D) nominal GDP.
Suppose the interest parity condition holds. Also assume that the one-year interest rate in the United States is 6% and that the one-year interest rate in Canada is 6%. What does this imply about the current versus future expected exchange rate (for the U.S. and Canadian dollars)? Explain
What will be an ideal response?
For a firm to become a monopoly in an industry
A) barriers to entry must exist. B) the firm must charge higher prices than its competitors. C) the firm must produce a product with the best quality. D) the firm will engage in unfair practices to drive all competitors out of the market.
If a corporation goes bankrupt, who among the following has first claim on the firm's assets?
A) stockholders B) the state where the corporation was chartered C) employees D) bondholders