If Congress decreases the amount of government insurance on bank deposits, then this action would:
A. Create a moral hazard problem
B. Reduce a moral hazard problem
C. Create an adverse selection problem
D. Reduce an adverse selection problem
B. Reduce a moral hazard problem
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If the Fed buys government bonds on the open market, which of the following will occur?
A. The money supply will contract. B. The market rate of interest on corporate bonds will increase. C. The market rate of interest on government bonds will increase. D. The interest rate will fall.
Which of the following can most easily be converted into goods and services?
a. money b. CDs c. stocks d. bonds
Reducing the maximum LTV is likely to ________ demand and thus ________ the housing price increase
A) decrease; slow down B) increase; slow down C) decrease; speed up D) increase; speed up
An annually balanced federal budget ________ macro- stabilization policy by requiring ________ fiscal policy during recessions
A) inhibits, tighter B) inhibits, easier C) assists, tighter D) assists, easier