The root of the savings and loan debacle was
A. the corruption of management.
B. the low rates of interest paid to the depositors.
C. long term (30-year) outstanding loans at extremely low interest rates.
D. high risk short term loans.
C. long term (30-year) outstanding loans at extremely low interest rates.
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A higher savings rate that leads to an increase in the capital stock
A) leads to higher interest rates. B) leads to increases in labor productivity. C) immediately decreases investment. D) is associated with a decrease in the rate of growth of the population.
A(n) ________ is an example of a quota where foreigners hold quota licenses
A) voluntary export restraint B) embargo C) auction quota D) All of the above
Suppose the economy currently has an inflationary gap. The Fed engages in contractionary monetary policy. The impact of contractionary monetary policy will be to
A) increase short-run aggregate supply, decrease in prices and decrease in real GDP. B) increase short-run aggregate supply, decrease prices and increase real GDP. C) decrease aggregate demand, decrease prices, and increase real GDP. D) decrease aggregate demand, decrease prices, and decrease real GDP.
Under perfect competition, existing firms leave the market in the long run if the price falls below total fixed cost
a. True b. False Indicate whether the statement is true or false