Question 1

What amount of money was appropriated by Congress for the Troubled Asset Relief Program?

Accepted Answer

A) $225 billion 
B) $252 billion 
C) $700 billion 
D) $787 billion 
A) $225 billion 
B) $252 billion 
C) $700 billion 
D) $787 billion

Question 2

As a result of Lehman's collapse, real GDP first began to fall in

Accepted Answer

A) the fourth quarter of 2007. 
B) the second quarter of 2008. 
C) the third quarter of 2008. 
D) the first quarter of 2009. 
A) the fourth quarter of 2007. 
B) the second quarter of 2008. 
C) the third quarter of 2008. 
D) the first quarter of 2009.

Question 3

Assume that Michaela purchases $12,000 worth of a stock.To do so she uses $2,000 of her own money and borrows the remaining $10,000 at an 8.0% interest rate.If the stock's value increases by 20% in one year and she sells the stock at that time, what is her rate of return?

Accepted Answer

A) 13% 
B) 16% 
C) 20% 
D) 80% 
A) 13% 
B) 16% 
C) 20% 
D) 80%

Question 4

In 2008, the Fed utilized expansionary monetary policy which was made

Accepted Answer

A) more effective as banks held more excess reserves. 
B) less effective as banks held more excess reserves. 
C) more effective as banks held less excess reserves. 
D) less effective as banks held less excess reserves. 
A) more effective as banks held more excess reserves. 
B) less effective as banks held more excess reserves. 
C) more effective as banks held less excess reserves. 
D) less effective as banks held less excess reserves.

Question 5

Which elements of GDP were affected by the financial crisis and the lack of available credit?

Accepted Answer

A) consumption and business investment only 
B) consumption and government spending only 
C) consumption, business investment and government spending only 
D) consumption, business investment, government spending and imports/exports 
A) consumption and business investment only 
B) consumption and government spending only 
C) consumption, business investment and government spending only 
D) consumption, business investment, government spending and imports/exports

Question 6

What amount of money was appropriated by Congress for fiscal stimulus bill of 2009?

Accepted Answer

A) $225 billion 
B) $252 billion 
C) $700 billion 
D) $787 billion 
A) $225 billion 
B) $252 billion 
C) $700 billion 
D) $787 billion

Question 7

Subprime mortgages frequently featured small or zero down payments.

Accepted Answer

A) True 
 B)False

Question 8

There is essentially no risk of default for U.S.government securities.

Accepted Answer

A) True 
 B)False

Question 9

An increase in the price of a particular bond implies an increase in the interest rate for that bond.

Accepted Answer

A) True 
 B)False

Question 10

The United States has not experienced a recession as severe as the 2007-2009 downturn since the 1930s.

Accepted Answer

A) True 
 B)False

Question 11

During the financial crisis associated with the Great Recession, the interest rate spread between Treasury bills and bank-to-bank lending increased substantially.

Accepted Answer

A) True 
 B)False

Question 12

When the housing price bubble burst, there were some obvious effects on the economy, and some that were not so obvious.​Explain these.

Accepted Answer

​When the housing price bubble burst, ob

Question 13

Most economists feel that overly strict financial regulation from 2000 to 2006 contributed to the financial crisis of 2007-2009.

Accepted Answer

A) True 
 B)False

Question 14

The Lehman Brothers bankruptcy triggered a financial panic that featured

Accepted Answer

A) an increase in Treasury interest rates and an increase in most other interest rates. 
B) an increase in Treasury interest rates and a decrease in most other interest rates. 
C) a decrease in Treasury interest rates and an increase in most other interest rates. 
D) a decrease in Treasury interest rates and a decrease in most other interest rates. 
A) an increase in Treasury interest rates and an increase in most other interest rates. 
B) an increase in Treasury interest rates and a decrease in most other interest rates. 
C) a decrease in Treasury interest rates and an increase in most other interest rates. 
D) a decrease in Treasury interest rates and a decrease in most other interest rates.

Question 15

The Fed's loan that effectively nationalized AIG was approved by Congress.

Accepted Answer

A) True 
 B)False

Question 16

The 2009 fiscal stimulus bill represented approximately

Accepted Answer

A) 5.5% of GDP and was designed to close the expansionary gap. 
B) 5.5% of GDP and was designed to close the recessionary gap. 
C) 7.8% of GDP and was designed to close the expansionary gap. 
D) 7.8% of GDP and was designed to close the recessionary gap. 
A) 5.5% of GDP and was designed to close the expansionary gap. 
B) 5.5% of GDP and was designed to close the recessionary gap. 
C) 7.8% of GDP and was designed to close the expansionary gap. 
D) 7.8% of GDP and was designed to close the recessionary gap.

Question 17

If a 10-year Treasury bond pays 3.1% and a 10-year corporate bond pays 7.4%, what is the interest rate spread on this particular corporate bond?

Accepted Answer

A) 4.3% 
B) 7.4% 
C) 10.5% 
D) 22.9% 
A) 4.3% 
B) 7.4% 
C) 10.5% 
D) 22.9%

Question 18

In 2007, which U.S.firm showed the first indication of significant problems in the financial sector?

Accepted Answer

A) AIG 
B) Bear Stearns 
C) J.P.Morgan Chase 
D) Lehman Brothers 
A) AIG 
B) Bear Stearns 
C) J.P.Morgan Chase 
D) Lehman Brothers

Question 19

The Federal Reserve helped J.P.Morgan purchased Bear Stearns by agreeing to purchase some unwanted Bear Stearns assets.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following are not valid arguments against the effectiveness of the fiscal stimulus bill?

Accepted Answer

A) Employment continued to fall into early 2010. 
B) Without stimulus recessions come to an end naturally. 
C) State and local government spending increased. 
D) Monetary policy played a large role in stimulating the economy. 
A) Employment continued to fall into early 2010. 
B) Without stimulus recessions come to an end naturally. 
C) State and local government spending increased. 
D) Monetary policy played a large role in stimulating the economy.

Exam 31: He Financial Crisis and the Great Recession

What amount of money was appropriated by Congress for the Troubled Asset Relief Program?

As a result of Lehman's collapse, real GDP first began to fall in

Assume that Michaela purchases $12,000 worth of a stock.To do so she uses $2,000 of her own money and borrows the remaining $10,000 at an 8.0% interest rate.If the stock's value increases by 20% in one year and she sells the stock at that time, what is her rate of return?

In 2008, the Fed utilized expansionary monetary policy which was made

Which elements of GDP were affected by the financial crisis and the lack of available credit?

What amount of money was appropriated by Congress for fiscal stimulus bill of 2009?

Subprime mortgages frequently featured small or zero down payments.

There is essentially no risk of default for U.S.government securities.

An increase in the price of a particular bond implies an increase in the interest rate for that bond.

The United States has not experienced a recession as severe as the 2007-2009 downturn since the 1930s.

During the financial crisis associated with the Great Recession, the interest rate spread between Treasury bills and bank-to-bank lending increased substantially.

When the housing price bubble burst, there were some obvious effects on the economy, and some that were not so obvious.​Explain these.

Most economists feel that overly strict financial regulation from 2000 to 2006 contributed to the financial crisis of 2007-2009.

The Lehman Brothers bankruptcy triggered a financial panic that featured

The Fed's loan that effectively nationalized AIG was approved by Congress.

The 2009 fiscal stimulus bill represented approximately

If a 10-year Treasury bond pays 3.1% and a 10-year corporate bond pays 7.4%, what is the interest rate spread on this particular corporate bond?

In 2007, which U.S.firm showed the first indication of significant problems in the financial sector?

The Federal Reserve helped J.P.Morgan purchased Bear Stearns by agreeing to purchase some unwanted Bear Stearns assets.

Which of the following are not valid arguments against the effectiveness of the fiscal stimulus bill?

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

Securities: Business Finance and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets: the Price System

The Shortcomings of Free Markets

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

Is Useconomic Leadership Threatened

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Filters

When the housing price bubble burst, there were some obvious effects on the economy, and some that were not so obvious.Explain these.