In response to the financial crisis which followed the housing bubble collapse, policy-makers feared stimulating demand would cause:
A. hyperinflation.
B. deflation.
C. inflation.
D. stagflation.
Answer: D
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The three approaches to measuring economic activity are the
A) cost, income, and expenditure approaches. B) product, income, and expenditure approaches. C) consumer, business, and government approaches. D) private, public, and international approaches.
The law of comparative advantage says that
a. the individual with the lowest opportunity cost of producing a particular good should produce it b. comparative advantage exists only when one person has an absolute advantage in the production of two goods c. whoever has a comparative advantage in producing a good also has an absolute advantage in producing that good d. whoever has an absolute advantage in producing a good also has a comparative advantage in producing that good e. gains from trade are possible only when one person has the comparative advantage in producing both goods
According to the law of supply, there is a
A. positive relationship between price and the quantity of a good supplied. B. negative relationship between price and the quantity of a good supplied. C. positive relationship between price and the change in supply. D. negative relationship between price and the change in supply.
Collateralized default swaps:
A. helped reduce the losses from the mortgage default crisis. B. involve exchanging high-risk mortgages for low-risk mortgage-backed securities. C. are loans to investors in mortgage-backed securities. D. insured holders of loan-backed securities in case the underlying loans were not repaid.