Is monetary policy more effective in recessions or inflationary periods? Explain
Monetary policy is more effective in inflationary periods when the Fed tries to curb inflation than it is in
recessions when the Fed tries to promote employment. This is because the Fed can prevent banks from
making loans during inflationary periods by reducing their excess reserves, but it cannot force people to
borrow during recessions when it takes steps to increase banks' excess reserves.
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The percentage of American families with incomes below the poverty line was ________ in 1960 and ________ in 2010
A) 10.1%; 10.7% B) 8.7%; 13.9% C) 18.1%; 11.8% D) 26.8%; 48.3%
If your risk of losing your house to catastrophe is 25%, how much would fair insurance cost if your home were worth $1,000,000?
A) $250,000 B) $750,000 C) $1,000,000 D) Unable to determine with the information given.