To move quickly to turn around the crisis during 2007-2008, the U.S. Federal Reserve relied on:
a. lowering taxes.
b. removing restrictions on collateral, adding more categories of securities purchased by the Federal Reserve, and expanding its operations with nonbank dealers.
b. tightening up credit rules and keeping banks out of trouble.
d. admonishing the administration for its excessive debt situation.
Ans: b. removing restrictions on collateral, adding more categories of securities purchased by the Federal Reserve, and expanding its operations with nonbank dealers.
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How does an increase in the price level affect the aggregate planned expenditure curve and the aggregate demand curve?
What will be an ideal response?
Refer to Figure 10-8. If the price of biscotti is $1.50 and the price of a cappuccino is $3.00, what is the slope of the budget constraint?
A) -(3.00 - 1.50 )/(3.00 + 1.50 ) = -1/3 B) -2 C) -1/2 D) The slope cannot be determined without the value of income.
Which of the following is an outcome of advertising for a monopolistically competitive firm? a. Long-run average costs shift downward
b. The firm's demand curve becomes flatter and shifts inward. c. The firm's demand curve keeps the same slope and shifts inward. d. Long-run average costs shift upward.
Exhibit 11-11 GDP data (billions of dollars) Personal consumption expenditures$4,750 Exports810 Government spending1,400 Social Security taxes600 Depreciation450 Indirect business taxes550 Imports850 Gross private domestic investment900 Corporate income taxes200 Personal taxes800 Corporate profits50 Transfer payments700 In Exhibit 11-11, and using the expenditures approach, gross domestic product (GDP) equals:
A. $7,010 billion. B. $10,360 billion. C. $9,660 billion. D. $7,860 billion.