When the policy rate increases,
A) IS curve does not change.
B) IS curve shifts to the right.
C) IS curve shifts to the left.
D) LM curve shifts upward.
E) LM curve shifts downward.
A
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Banks and other financial institutions engage in financial intermediation, which
A) can hurt the performance of the economy. B) can benefit economic performance. C) has no effect on economic performance. D) involves borrowing from investors and lending to savers.
The issue with centralized versus decentralized decision making is that
A. it is always easy to find out which is better, but not all may agree. B. centralization is always better because one person controls all information. C. decentralization is always better because many people can split the tasks. D. it is difficult to find out whether one is better than the other in the hierarchy.