What was the dilemma that faced the European Central Bank in response to the sovereign debt crisis of 2010?
What will be an ideal response?
It could intervene to buy some of the debt, but doing so might increase further the amount of liquidity in the European financial system, raising expectations of higher future inflation. In addition, buying debt might be seen as approving the poor budgetary policies of some of the governments, thereby increasing moral hazard.
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The demand for loanable funds curve shifts rightward when
A) expected profit decreases. B) the real interest rate rises. C) the real interest rate falls. D) expected profit increases. E) wealth rises.
Which of the following is considered human capital?
a. the ingredients a chef uses to prepare meals b. the pots and pans and other tools a chef uses to prepare meals c. the financial capital a chef uses to start his own restaurant d. the skills a chef learns when attending a class about cake decorating