Given the expected price level, policies for reaching potential GDP will work best if the money supply is:
a. large, so that prices at potential GDP are below expectations and people can afford to buy enough goods to support the natural level of employment.
b. large enough, so that prices at potential GDP are above expectations and firms can afford to hire workers.
c. small, so that prices at
potential GDP are below expectations and people can afford to buy enough goods to support the natural level of employment.
d. small, so that prices at potential GDP are above expectations and firms can afford to hire the workers.
e. exactly the size that makes prices equal to the prices people expected to prevail.
e
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Which one of the following would cause an increase in the supply of cardboard?
A) a decrease in the demand for cardboard B) an increase in the price of cardboard C) an increase in taxes applied to cardboard producers D) an improvement in the technology used to produce cardboard
The increase in the share of loans extended to borrowers with little or no down payment contributed to the financial crisis of 2008 because these loans
a. initially depressed housing prices. b. were extended only to borrowers with prime credit status. c. had much higher default rates than loans to borrowers making larger down payments. d. were unavailable to low-income borrowers, who would have profited the most from such loans.