The "Greenspan doctrine"—central banks should not try to prick bubbles—was based on which of the following arguments?
A) Asset-price bubbles are nearly impossible to identify.
B) Monetary actions would be likely to affect asset prices in general, rather than the specific assets that are experiencing a bubble.
C) Raising interest rates has often been found to cause a bubble to burst more severely.
D) Monetary policy actions to prick bubbles can have harmful effects on the aggregate economy.
E) All of the above.
E
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Claire and Dag are farmers who produce beef and corn. In a year, Claire can produce 16 tons of beef or 40 bushels of corn, while Dag can produce 5 tons of beef or 25 bushels of corn. The opportunity cost of producing a ton of beef is
A) 10 bushels of corn for Dag and 8 bushels of corn for Claire. B) 5 bushels of corn for Dag and 2.5 bushels of corn for Claire. C) 20 bushels of corn for Dag and 50 bushels of corn for Claire. D) 36.5 days for Dag and 45.6 days for Claire.
An increase in the opportunity cost of holding money creates a ________ the money demand curve and an increase in real GDP creates a ________ the money demand curve
A) leftward shift of; movement down along B) rightward shift of; movement down along C) movement up along; leftward shift of D) movement up along; rightward shift of
Consider the special panel case where T = 2. If some of the omitted variables, which you hope to capture in the changes analysis, in fact change over time, then the estimator on the included change regressor
A) will be unbiased only when allowing for heteroskedastic-robust standard errors. B) may still be unbiased. C) will only be unbiased in large samples. D) will always be unbiased.
If the equilibrium rate of interest would be 10 percent, but the usury law sets 8 percent,
a. the quantity of funds supplied would be greater than the quantity demanded. b. economic efficiency would be promoted. c. some applicants for loans would likely be turned down. d. lenders would be able to fund fully all requests for loans.