Monetary policy has the power to make recessions more severe and long-lasting if it is not timed well
Indicate whether the statement is true or false
TRUE
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The Roomba 570 is a robotic vacuum cleaner made and sold by iRobot. It can vacuum 4 rooms on a single battery charge and it costs $2 worth of electricity to charge the Roomba
Lynn is a house cleaner and can vacuum 4 rooms in 1 hour with a traditional vacuum. Suppose you want the 4 rooms in your house vacuumed once a week for one year. Ignoring the cost of any electricity Lynn uses, which method is economically efficient if Lynn charges $20 per hour? $30 per hour? A) Roomba if Lynn charges $20 per hour and Lynn if she charges $30 per hour B) Lynn if she charges $20 or $30 per hour C) Roomba if Lynn charges $20 or $30 per hour D) Lynn if she charges $20 per hour and Roomba if Lynn charges $30 per hour
In the case where interest rates are lower in Japan, which of the following is an example of a "carry trade"
a. Increase borrowing in the US, convert to Yuan and invest in financial assets in Japan b. Increase borrowing in Japan and invest in Japan c. Increase borrowing in Japan, convert to Dollars and invest in the US d. Increase borrowing in the US and invest in the US