Explain the three channels economists have identified through which quantitative or credit easing may affect the economy
What will be an ideal response?
1 ) When arbitrage fails, credit easing can work. 2 ) Quantitative easing may affect expectations of future nominal interest rates. 3 ) Quantitative easing may affect expectations of inflation.
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The term "industry concentration":
A) refers to the degree of product differentiation in an industry. B) is a measure of how many firms produce the total output of an industry. C) refers to how capital or labor intensive a particular industry is. D) is a measure of how many customers purchase the total output of an industry.
Other things equal, the prospect of imitation by others:
A. decreases the expected rate of return on R&D expenditures. B. increases the expected rate of return on R&D expenditures. C. increases the interest-rate cost of funds used to finance R&D expenditures. D. decreases the interest-rate cost of funds used to finance R&D expenditures.