When the Fed sells securities through open market operations, the equation of exchange (under monetarist assumptions about V being stable) requires that either aggregate spending
A. Or prices increase, or both.
B. Or prices decrease, or both.
C. Decreases or prices increase, or both.
D. Increases or prices decrease, or both.
Answer: B
Economics
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If there is currently a recessionary gap, a decrease in aggregate demand would make the recessionary gap larger
a. True b. False Indicate whether the statement is true or false
Economics
In events leading to the housing bubble, investment banks on Wall Street made money through the housing market by:
A. buying as many loans as possible to create mortgage-backed securities. B. offering low interest loans to those with very good credit. C. relying on banks to sell as few high-risk mortgages as possible. D. ensuring local banks were making good loans.
Economics