Refer to the table. For the open economy, the equilibrium GDP and the multiplier are:
Complete the following table and answer the question on the basis of the resulting data. All figures are in billions of dollars.
A. $300 and 2.5.
B. $450 and 5.
C. $400 and 4.
D. $400 and 5.
D. $400 and 5.
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Which of the following was true of the actions of the Federal Reserve in response to the recession of 2008?
a. The Fed shifted toward a highly restrictive monetary policy in 2008, which was a major cause of the recession. b. The Fed continued to focus only on price stability and therefore it expanded the money supply at a slow and steady rate throughout the recession. c. The Fed introduced several new procedures for the conduct of monetary policy and it increased the monetary base rapidly as the recession worsened. d. The Fed continued to purchase and sell only U.S. Treasury bonds when conducting open market operations to control the money supply.
Suppose that you lend $5,000 to a friend who pays you back $5,400 the next year. Suppose that prices that year rose by six percent and the real rate of return in the stock market was five percent. Your friend says that he or she was being more than fair by giving you more than the rate of inflation as a return. What do you think?
What will be an ideal response?