How does an expansionary monetary policy affect aggregate expenditures according to the bank lending channel?
What will be an ideal response?
In the bank lending channel, an expansionary monetary policy causes aggregate expenditure to increase for two reasons: (1 ) the increase in households' and firms' spending from the drop in interest rates, and (2 ) the increased availability of bank loans. In other words, if banks expand deposits by lowering interest rates on loans, the amounts that bank-dependent borrowers can borrow and spend increases at any real interest rate.
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Which of the following is an example of resources that are substitutes?
a. steel and glass used in auto manufacturing b. glue and wood used in furniture manufacturing c. buttons and cotton used in shirt manufacturing d. leather and rubber used in basketball manufacturing e. eggs and flour used in baking
Comparing the American healthcare system to other industrial nations, which of the following statements is FALSE?
A. Americans are admitted to the hospital with less frequency. B. Infant mortality rates are higher than in 80 percent of the other industrial countries. C. Childhood-immunization rates in the U.S. are lower. D. The American life expectancy is above average in comparison to other industrial nations.