Here is a consumption function: C = C0 + MPC(Yd). If consumption is $2,000, MPC =0.75, and disposable income is $2,000, what does autonomous consumption equal?
A) $950
B) $3,500
C) $500
D) $4,500
E) none of the above
C
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Once the federal funds rate is reduced to zero, conventional expansionary monetary policy is no longer an option
a. True b. False Indicate whether the statement is true or false
Which of the following was not a reason that the Federal Reserve took on additional risks associated with unconventional policy during the recession of 2007-2009?
a. The large budget deficit constrained fiscal policy. b. The inflated price of Treasury bills made them too expensive to purchase in open market operations. c. Only the Federal Reserve acting as the central bank can serve as the lender of last resort. d. The Fed was able to act more quickly than Congress.
If a hurricane were to wipe out the majority of the eastern seaboard in the United States, it would likely cause a:
A. short-run supply shock. B. long-run supply shock. C. long-run demand shock. D. short-run demand shock.
An example of ________ is a power plant generating water pollution.
A. a public good B. a negative production externality C. a positive production externality D. the free-rider problem