Milton Friedman believes that consumption spending depends on both permanent and transitory income
Indicate whether the statement is true or false
F
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Adam Smith believed that markets coordinated the self-interests of consumers
a. True b. False Indicate whether the statement is true or false
Which of the following contributed to the financial crisis of 2008?
a. the housing price boom (2002-2005), followed by a housing price bust (2007-2008) b. a sharp reduction in stock prices in 2008 c. a sharp increase in the price of crude oil from January 2007 to mid-year 2008 d. all of the above
The U.S. economy has had persistent inflation in recent decades. A possible explanation for the inflation is that
A. there have been decreases in aggregate demand while aggregate supply has remained unchanged. B. there have been increases in the growth rate while aggregate demand has remained unchanged. C. there have been decreases in the growth rate while aggregate demand has remained unchanged. D. growth in aggregate demand has been greater than growth in aggregate supply.
From the banker's perspective, dollars held as required reserves in bank vaults
A) earn a low rate of interest. B) earn no rate of interest. C) earn a market rate of interest. D) earn profits.