Author Question: Assume the central bank decides to raise the discount rate. Where and how should you begin your ... (Read 86 times)

swpotter12 · **on:** Jun 30, 2018

Assume the central bank decides to raise the discount rate. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions?
a. Start the analysis in the real credit market with supply of real credit shifting to the right.
b. Start the analysis in the real goods market with aggregate demand shifting to the left.
c. Start the analysis in the real credit market with demand for real credit shifting to the left.
d. Start the analysis in the real credit market with demand for real credit shifting to the right.
e. Start the analysis in the real credit market with supply of real credit shifting to the left.

Question 2

Financial disintermediation occurs when:
a. Individuals no longer trade securities in the secondary market.
b. Individuals withdraw funds from financial intermediaries and invest them elsewhere.
c. Businesses no longer borrow directly in the bond market.
d. All of the above.