Which of the following factors led to the housing bubble in the U.S. in 2006?
a. Increased amount of lending to subprime borrowers
b. Decreased money supply by Federal Reserve
c. Future expectation about downward movement of prices of the houses
d. Federal Reserve raised the market rate of interest
e. Increase in the supply of houses
a
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Which of the following is an example of expansionary monetary policy?
A) Congress passing a new government stimulus package. B) The Fed raising the discount rate for member banks. C) The Fed increasing the money supply to push interest rates lower. D) The president signing an executive order to raise the minimum wage of government employees.
If the demand for a product is said to be relatively inelastic, the "absolute" value of the elasticity coefficient will be
A) less than one. B) greater than one. C) equal to one. D) zero.