Quantitative easing involves policies that are designed to:
A. directly increase aggregate demand through increased government spending.
B. indirectly increase the money supply by decreasing interest rates.
C. directly increase the money supply by a certain amount.
D. indirectly increase aggregate demand through decreased taxes.
Answer: C
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Which of the following explains why mortgages weren't considered securities prior to 1970?
A) The Federal Reserve Act of 1913 prohibited mortgages from being considered securities. An amendment to the Act was approved in 1970 that allowed mortgages to be considered securities. B) Prior to 1970, mortgages were rarely resold in the secondary market. C) Until 1970, the average annual increase in housing prices did not allow the buying and selling of mortgages to be profitable. There has been a significant annual increase in housing prices and mortgage values since 1970. D) Congress passed a law in 1970 stipulating that mortgages could be classified as securities.
Which of the following is true for a lower price elasticity of demand coefficient?
a. The market is broadly defined. b. The quantity demanded is more responsive. c. Few substitutes exist. d. Many substitutes exist. e. All of these.