According to the Index of Economic Freedom, which of the following is the freest economy in the world?
a. Cuba
b. Zimbabwe
c. Hong Kong
d. North Korea
e. Libya
c
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Other things remaining the same, which of the following is likely to happen if there is a decrease in the price of cars?
A) There will be a decrease in both the wage rate and the employment levels in the petroleum extraction industry. B) There will be an increase in the wage rate and a decrease in the employment levels in the petroleum extraction industry. C) There will be a decrease in the wage rate and an increase in the employment levels in the petroleum extraction industry. D) There will be an increase in both the wage rate and the employment levels in the petroleum extraction industry.
The stock market provides two functions for corporate financing: reducing investors’ risk and setting the prices of stocks.
Answer the following statement true (T) or false (F)
Following the U.S. financial crisis in 2008, some observers assert that the policies of Fed Chairman Greenspan contributed to the crisis. Which of the following is a criticism of Greenspan's policies?
I. The very low interest rates used to fight the 2001 recession were maintained for too long, leading to the real estate bubble. II. The Fed provided real estate developers with liquidity to encourage property development and offered tax breaks to first-time home buyers, which in turn fueled the real estate bubble. III. The Fed did not promote appropriate regulations to deal with the new financial instruments that were created in the early 2000s. A) I and II only. B) I and III only. C) II and III only. D) I, II, and III.
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline