Why did some economists and policymakers criticize the Fed and Treasury for arranging the sale of Bear Stearns to JP Morgan Chase in 2008?
What will be an ideal response?
The main concern was with the moral hazard problem, which is the possibility that managers of financial firms such as Bear Stearns might make riskier investments if they believe that the federal government will save them from bankruptcy.
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Refer to the figure above. If the relative price of T were to increase, then the price line would
A) shift out in a parallel fashion. B) shift in a parallel fashion. C) become steeper. D) become flatter.
In the short run, an increase in the price level causes which of the following: a. A rightward shift in the aggregate demand curve
b. A leftward shift in the short-run aggregate supply curve. c. A rightward shift in the short-run aggregate supply curve. d. A movement upward along the short-run aggregate supply curve.