Why was so much of the "boom" of the 2000s concentrated in the housing and real estate sectors?
A) The Fed attempted to engineer an increase not only in real GDP, but in particular further the expansion of those sectors.
B) The Community Reinvestment Act (CRA) called for banks to offer subprime loans to at-risk customers.
C) People were encouraged to "flip" houses because the low interest and rate and easy lending practices made it appear profitable to do so.
D) For all of the above reasons.
D
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According to Alfred Chandler (1977), big business could be justified, at least in part, by
(a) a rapid rate of innovation among big firms. (b) periodic recessions in which alert big businessmen buy out bankrupt firms and expand operations. (c) a relatively low rate of bankruptcies among big firms. (d) its ability to take advantage of scale economies—big business could best take advantage of technology and economies resulting from large-scale production processes.
One argument in favor of activist monetary policy is that the economy does not always equilibrate quickly enough at Natural Real GDP
Indicate whether the statement is true or false