Which of the following is a distinctive feature of a credit-driven asset-price bubble?
A) asset-price increases that are "justified" by projections of future value
B) a weakening of lending standards
C) an increase in the number and variety of market participants
D) The affected assets are financial stocks or bonds issued by companies in the financial sector.
B
You might also like to view...
Briefly, what are the major causes of export earnings instability for developing countries?
What will be an ideal response?
The Laffer Curve demonstrates that _____
a. at some level of tax rates, tax revenues decline b. there is no relationship between tax rates and tax revenue c. there is no relationship between tax rates and labor supply d. at some level of tax rates, labor supply declines
A possible market solution that a reputable firm can engage in when faced with the lemons problem is
A) to offer a warranty. B) to engage in externalities. C) to create asymmetric information. D) to use average cost pricing.
The government wishes to close an inflationary gap by reducing real GDP by $400 billion. Assuming a tax multiplier of 4 and an income multiplier of 5, which of the following policy prescriptions would reduce the inflationary gap by $400 billion?
A. Decreasing government spending by $400 billion and increasing taxes by $400 billion. B. Decreasing government spending by $160 billion and decreasing taxes by $100 billion. C. Decreasing government spending by $40 billion and decreasing taxes by $40 billion. D. Decreasing government spending by $80 billion and keeping taxes the same.