Answer the following questions true (T) or false (F)
1. An argument in favor of the Federal Reserve adopting inflation targeting is that in the long run, the Fed can have an impact on inflation but not on real GDP.
2. A borrower defaults on a loan when he stops making payments on the loan.
3. The Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association were established by Congress in order to regulate banks that buy and sell mortgage-backed securities.
1. TRUE
2. TRUE
3. FALSE
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Refer to Table 2-17. What is Lucy's opportunity cost of making a tricycle?
A) 3/4 of a wagon B) 1 1/3 tricycles C) 3 wagons D) 2 tricycles
One of the factors contributing to the fact that labor productivity is higher in the U.S. than in the People's Republic of China is
A) China's larger stock of capital. B) the higher capital/labor ratio in China. C) the higher capital/labor ratio in the U.S. D) China's smaller stock of fossil fuels. E) the fact that much labor in the U.S. is in management.