During the financial crisis of 2007–2009, why did the Federal Reserve begin to utilize various types of unconventional monetary policy?
A. The federal funds rate had already been increased as much as possible.
B. The discount rate had already been increased as much as possible.
C. The federal funds rate had already been reduced to zero.
D. The discount rate had already been reduced to zero.
Answer: C
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Cyclical unemployment is equal to zero when:
A. actual GDP and potential GDP are equal. B. there is no recessionary gap. C. there is no expansionary gap. D. frictional unemployment equals structural unemployment.
Which of the following statements is true?
A) The principle of comparative advantage provides a basis for trade when two nations have the same opportunity cost of producing a good. B) The principle of absolute advantage provides a basis for the determination of the terms of trade between two trading nations. C) The principle of absolute advantage forms the basis of trade when a nation can produce more of all the goods and services compared to the other nations. D) The principle of comparative advantage provides a range of prices within which trade will occur.
Bubba's Hula Shack bar and bistro has begun giving customers who can show proof that they arrived at the establishment by public transportation a 10 percent discount on their total bill
All else equal, customers who arrive by public transportation to take advantage of Bubba's Hula Shack discount have a ________ for the services of the establishment than customers who drive to the establishment. A) higher price elasticity of supply B) lower price elasticity of supply C) lower price elasticity of demand D) higher price elasticity of demand