According to this Application, economist John Taylor believes that if the Fed had not followed "easy money" policy during the early 2000s,
A) housing starts would have declined quicker, accelerating the timing and severity of the housing bust.
B) housing starts would have been much higher and the housing boom would have continued.
C) housing starts would have been much lower and the housing boom and bust would have been avoided.
D) housing starts would have stabilized, leading to a mild housing boom with no bust.
C
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The above figure gives your budget line between CDs and magazines. Which combination of CDs and magazines are affordable?
A) combination a B) combinations a, b, c, and d C) combination c only D) combinations b, c, and d
In the RBC model, an adverse supply shock causes the decrease in natural real GDP to be maximized when the labor supply curve is
A) relatively steep. B) relatively flat. C) vertical. D) horizontal.