Some experts have argued that the Fed contributed to the housing bubble by:
A. lowering interest rates, despite the fact that the Taylor rule indicated keeping them high.
B. approving the purchase of high-risk assets by banks, even though there was a risk of them defaulting.
C. not regulating non bank financial institutions who were coming up with innovative mortgages.
D. following the Taylor Rule, which during the 2000s indicated that rates should be kept low.
Answer: A
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Social motives include all of the following EXCEPT:
A. altruism. B. fairness. C. the desire to create a favorable impression. D. risk aversion.
Which of the following is added to arrive at GDP? a. The value of "free" household services provided by at home spouses rather than a paid cook, housekeeper, and baby sitter. b. The value of unpaid volunteer time
c. The unpaid services provided by the natural environment, such as breathable air. d. Net exports.
The urban consumers that the CPI is based on includes:
A. retired persons. B. greeters at Walmart. C. bank tellers. D. All of these are included.
A $2,000 decrease in investment will shift the aggregate expenditures curve down by:
A. exactly $2,000 and will decrease the equilibrium level of real GDP by exactly $2,000. B. exactly $2,000 and will decrease the equilibrium level of real GDP by less than $2,000. C. exactly $2,000 and will decrease the equilibrium level of real GDP by more than $2,000. D. less than $2,000 and will decrease the equilibrium level of real GDP by less than $2,000.