At the time of the South Korean financial crisis, the government allowed many chaebol owned finance companies to convert to merchant banks. Finance companies ________ allowed to borrow abroad and merchant banks ________

Which among the following will happen if the Fed buys bonds from a private bank?

A) The private bank's total assets will decrease. B) The Fed's total assets will decrease. C) The private bank's total assets will increase. D) The Fed's total liabilities will increase.

Macland is going through a recession, and its government is borrowing 1 billion dollars to increase government spending and stimulate the economy. This has increased the interest rate, decreasing the number of private investors. What is this situation in investments called?

a. crowding out b. expansionary fiscal policy c. liquidity trap d. interest rate appreciation