As a result of the failure of fed policy

Assignment Help Business Economics

Reference no: EM13986759

As a result of the failure of Fed policy between 2004 and 2007: a)The failure of long term interest rates to rise allowed the housing bubble to continue to grow. b)The decrease in long term interest rates resulted in an inflation rate that exceeded 10%. c)A steep rise in long term interest rates led to the current banking crisis. d)The increase in the Federal Funds interest rate led to the current recession that started in December 2007.

Between January 2004 and 2007, the federal funds interest rate increased from 1% to over 5%. As a result: a)The 10-year Treasury rate also increased by 4%. b)The 20-year Treasury rate remained about constant. c)The 10-year Treasury rate decreased by 4%. d)The 20-year Treasury rate increased by 3%.

Between January 2007 and January 2009, the federal funds interest rate decreased from 5.25% to below 1%. As a result: a The 10-year Treasury rate decreased by 5% resulting in a significant increase in business investment. b) The 10-year Treasury rate remained relatively constant, but there was still a significant increase in business investment due to strong consumer demand. c) The 10-year Treasury rate remained relatively constant, and so did business investment. d) Despite a decrease in the 10-year Treasury rate, business investment failed to respond due to weak consumer demand.

Reference no: EM13986759

Questions Cloud

Calculate the cross price elasticity of demand for good : Assume that the demand for product X is represented by the following equation: QDx = 400 – 5Px + 4Py -3Pz iii) Calculate the cross price elasticity of demand for Good Y and Good X if If you are told that Py = 25 and Pz = 50.

Develop a strategy for a firm to make sure its products : Develop a strategy for a firm to make sure it’s products always stay a big step ahead of its present competitors and also ahead of anyone else who threatens to come into their markets and compete with it. When you then put the strategy into execution..

Marginal rate of substitution between good : Suppose Ann's marginal rate of substitution between good y and good x is -2. Bill's marginal rate of substitution between good y and good x is -3. each consumer has 10 units of each good. Propose a trade between Ann and Bill that would make each cons..

Expansionary monetary policy is less likely to be effective : An expansionary monetary policy is less likely to be effective if: Assume we have the following economic data: Unemployment rate = 8% Inflation rate = 2% Annual labor force growth rate = 1% Annual increase in worker productivity = 1% Using the above ..

As a result of the failure of fed policy : As a result of the failure of Fed policy between 2004 and 2007: Between January 2004 and 2007, the federal funds interest rate increased from 1% to over 5%. As a result: Between January 2007 and January 2009, the federal funds interest rate decreased..

Assume increase in government spending : Assume increase in government spending. Would the effect on AD be larger if the Fed held MS constant in response or if the Fed were committed to maintaining a fixed interest rate?

Consumption goods and time spent on leisure : Sam has preferences for consumption goods (C) and time spent on leisure (L). The utility function is u(C,L) = CL. The household also has a home production technology summarized by a production function. How much time will Sam spend in leisure? How ma..

What is the four-firm concentration ratio for this industry : Consider data on U.S. Pizza Sales from 2005. The market shares of the top 4 firms was 17% for Pizza Hut, 11% for Domino’s, 6% for Papa John’s, and 2.5% for Little Caesars. Firms 5 through 25 combined summed to 14.5%, and all other independents outsid..

Expression for the expected marginal revenue function : A risk neutral monopoly must set output before it knows for sure the market price. There is a 50% chance the firm's demand will be P=20-Q and a 50% chance it will be P=40-Q. The marginal cost of the firm is MC=Q. What is the expression for the expect..

User Account

All Pages