• I'm using the book Macro Economics 3rd edition by Charles I. Joes

Based on our lectures and textbook, which of the statements below is the best description of the prelude to the 2008 Financial Crisis? *

1 point

Between years 2000 and 2006, the stock market experienced unprecedented growth in prices. In 2006 the bubble burst and stock prices fell by about 71% between then and 2012.

Between years 2000 and 2006, the housing market experienced unprecedented growth in prices. In 2006 the bubble burst and housing prices fell by about 36% between then and 2012.

Between years 2000 and 2006, the stock market experienced unprecedented growth in prices. In 2006 the bubble burst and stock prices fell by about 25% between then and 2012.

Between years 2000 and 2006, the housing market experienced unprecedented growth in prices. In 2006 the bubble burst and housing prices fell by about 71% between then and 2012.

Which of the following measurements provides clear indication of lack of confidence in the creditworthiness of banks and other private companies? *

1 point

The increase in the fed funds rate.

The increase in the spread between the yield on corporate bonds and the yield on government debt.

The reduction in the spread between the yield on corporate bonds and the yield on government debt.

The reduction in short-run output.

In the context of the 2008 Recession, which government program was rolled out to clean up the balance sheets of financial institutions of "toxic" assets (i.e. mortgage-based securities)? *

1 point

The 2010 Affordable Care Act.

The CARES Act with a budget of $2.2 trillion.

The 2009 American Recovery and Reinvestment Act with a budget of $0.8 trillion.

The 2008 Troubled Asset Relief Program with a budget of $0.7 trillion.

Which measurements better summarize the intensity of the 2008 Recession? *

1 point

Short-run output reached -16%, 20.5 million jobs were lost and the unemployment rate increased by about 13 percentage points.

Short-run output reached -7%, 8.5 million jobs were lost and the unemployment rate increased by about 5 percentage points.

Short-run output reached -12%, 5.5 million jobs were lost and the unemployment rate increased by about 10 percentage points.

Short-run output reached -3%, 2.5 million jobs were lost and the unemployment rate increased by about 3 percentage points.

Which of the factors below account for the Fed's inability to lower the cost of borrowing during the 2008 Financial Crisis? *

1 point

The discount rate remained above the fed funds rate.

The risk premium on loans to corporations increased sharply.

The risk premium on loans to the Federal government increased sharply.

The discount rate remained below the fed funds rate.