Which of the following has been the most likely effect of the Fed's credit policy?
A) Banks and other financial institutions have taken more time to recover from the 2008-2009 financial meltdown.
B) The scope of asymmetric information problems in the banking industry has reduced.
C) The money multiplier and the link between the money supply and the economy have become unstable.
D) The federal funds rate and the discount rate have dropped to negative levels.
C
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Assume that the dollar price of a basket of goods in the U.S. is $4 and the Indian price for the same basket is 200 rupees. On the other hand, the dollar price of the Indian basket is $20
Given this information, the Indian price for the Indian basket will be: A) $1,200. B) $1,000. C) $200. D) $5.
In the above figure, what happens to the firm's optimal level of output if the price it receives for its product decreases from P4 to P3?
A) Output stays the same. B) Output decreases. C) Output increases. D) There is not enough information provided to know what happens to output.