What do the Monetarist and Keynesian economists claim was the main cause of the Great Depression?
(a) A contraction in supply
(b) A downturn in demand
(c) The falling federal deficit
(d) All of the above
(b)
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Last week, 13 Mexican pesos could purchase one U.S. dollar. This week, it takes 11 Mexican pesos to purchase one U.S. dollar. This change in the value of the dollar will ________ exports from the United States to Mexico and ________ U.S
aggregate demand. A) decrease; increase B) increase; increase C) decrease; decrease D) increase; decrease
The facility that was created in December of 2007 that banks can use to borrow from the Fed that has less of a stigma for banks compared to borrowing from the discount window is the
A) Term Securities Lending Facility. B) Term Auction Facility. C) Primary Dealer Credit Facility. D) Commercial Paper Funding Facility.
Jim's Hardware Supply has theft insurance. Jim also has an alarm system. The alarm system has just recently malfunctioned. If Jim has the alarm system repaired, it will cost him $100. The probability of a theft occurring is p = 0.0001
If a theft occurs and there is no alarm system, the value of stolen materials will be $125,000. However, Jim's insurance will compensate him fully for the loss. No thefts will occur if the alarm system is in place. What is the expected cost to Jim of repairing the alarm system? What is the expected cost to society of not repairing the alarm system?
Which of the following monetary policies reduces aggregate demand and output?
A. A cut in the required reserve ratio B. An open market purchase of government securities C. An increase in the discount rate D. A cut in the federal funds rate