Which of the following is most likely to lead to an increase of 1% in the nominal demand for money?
A) An increase in real income of 0.5%
B) A decrease in real income of 0.5%
C) A decline of 1% in the price level
D) An increase of 1% in the price level
D
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Uncovered interest parity refers to:
a. borrowing in the low-interest currency and lending in the high-interest currency without covering against a change in the exchange rates. b. foolish actions that usually are not successful. c. activities that are designed to raise or lower interest rates but are risky. d. the practice of depositing all of one's funds in one currency without regarding the pros and cons of such a transaction.
The subprime financial crisis caused a recession because of the ________ in adverse selection and moral hazard problems and the ________ in housing prices
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease