If the Fed does not take into account the additional policy channels available in an open economy, then ________ when conducting contractionary monetary policy
A) it is likely to decrease GDP too much and cause a recession
B) it is likely to decrease GDP too little and inflation will persist
C) it is likely to increase GDP too little and cause a recession
D) it is likely to increase GDP too much and inflation will persist
A
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The figure above provides information for a factory that produces chemicals that pollute a waterway. The waterway is used by water skiers. If the waterway is owned by a water ski club and the Coase theorem applies, then the factory will produce ________ tons of chemicals a week.
A) 1 ton B) as many tons as possible C) 3 tons D) 5 tons
Which of the following is true? a. In 2007, the default rate on fixed rate mortgages was lower than that on ARMs
b. From 2006-2008, housing construction decreased in the U.S. c. Zero-down mortgages decreased the incentive for homeowners to prevent defaulting on their homes. d. all of the above