If the economy is on the steep part of the aggregate supply curve, the output multiplier is close to zero.
Answer the following statement true (T) or false (F)
True
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Refer to Figure 5-4. What is the deadweight loss from producing at the market equilibrium?
A) area D B) area E C) area C D) area F
A problem with the too-big-to-fail policy is that it ________ the incentives for ________ by big banks
A) increases; moral hazard B) decreases; moral hazard C) decreases; adverse selection D) increases; adverse selection
The Fed has been able to achieve a zero rate of inflation throughout most of the 1990s
a. True b. False
Which statement is true about the banking industry in the 1920s?
a. Consumer confidence in banks increased during the 1920s. b. Bank failures caused by depositors withdrawing their money in large numbers were common. c. Bank executives were generally corrupt and were the primary cause of bank troubles. d. The industry was severely depressed during most of the decade.