When the U.S. government launched a massive rescue plan in response to the 2008-2009 financial crisis, the overall demand for loanable funds ________ because the ________
A) decreased; demand by households, businesses, and financial institutions changed by the same amount as the federal government demand
B) did not change; demand by households, businesses, and financial institutions changed by the same amount as the federal government demand
C) increased; demand by households, businesses, and financial institutions increased as did the federal government demand
D) decreased; demand by households, businesses, and financial institutions decreased by more than the federal government demand increased
E) increased; demand by households, businesses, and financial institutions increased by more than the federal government demand increased
D
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Refer to the scenario above. Beth should use ________ to play this game
A) forward induction B) backward induction C) mixed strategies D) her dominated strategy
How will the purchase of $100 million of government securities by the Federal Reserve change bank reserves and total checking account deposits in the banking system as a whole? Assume that banks do not hold any excess reserves, that households and
firms do not change the amount of currency they hold, and that the required reserve ratio is 20 percent.