Exam 14: Macroeconomic Policy: Challenges in a Global Economy

Which of these is NOT a way that hiring practices have changed over the past few decades?

When QE ended in 2014, the Fed had accumulated over _____ trillion in mortgage-backed securities.

U.S. Treasury securities are usually considered default free and are therefore in high demand when economic conditions make other securities seem riskier. What will happen to the U.S. government's ability to keep deficits and debt under control over the long term if world demand for Treasuries increases?

(Figure: Understanding Phillips Curves) What is the expected inflation rate associated with Phillips curve PC_a?

What are the policy implications of the rational expectations model? Use an example and a graph to support your response.

Real wages show how much goods and services our wages can buy.

Cite three factors that contributed to the jobless recovery from the 2007-2009 recession.

One major conclusion of the rational expectations theory is that

Wages above market-clearing rates, intended to improve morale and reduce turnover, are called _____ wages.

Workers work for the sake of making a nominal wage.

A shortcoming of the rational expectations hypothesis is that

_____ occurs when both inflation and unemployment increase over time.

One of the key factors leading to the Great Recession was

Which of these would lead to increased oversight of financial firms?

Adaptive expectations are formed when people use economic models to predict the future.

If wages increase 4% faster than productivity, inflation will be 3% higher because wages account for 75% of the total costs for a firm.

If inflationary expectations fall

What types of loans are NOT typically included in collateralized debt obligations?

A leveraged investment reduces the risk of losing money.

For developed countries like the United States and Japan, the increased pace of globalization has brought increased competition for resources.