Which of the following reduced the demand stimulus effects of the Fed's low interest rate policy pursued during, and after, the financial crisis of 2008-2009?
a. Declining stock prices during 2010-2012.
b. A reduction in the velocity of money.
c. An increase in earnings derived from money market accounts, saving deposits, and similar saving instruments.
d. A sharp increase in the rate of inflation during 2009-2012.
B
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Suppose output is $35 billion, government purchases are $10 billion, desired consumption is $15 billion, and desired investment is $6 billion. Desired savings is equal to
A) $2 billion. B) $10 billion. C) $14 billion. D) $16 billion.
Which of the following is a bank liability?
A) reserves B) consumer loans C) nontransaction deposits D) securities
The financial market shock which occurred during the recession of 2007-2009 increased the default-risk premium, causing the
A) IS curve to shift to the right. B) IS curve to shift to the left. C) MP curve to shift up. D) MP curve to shift down.
When you buy a new car, the dealer presents you with a set of keys and you drive away into the sunset. What would you do if, after agreeing to a price for the car, the dealer told you that a set of keys would cost an additional $5? What does this tell you about the price elasticity of demand for car keys? Explain