Related to the Economics in Practice on P

question 153

Multiple Choice

Related to the Economics in Practice on p. 607: The Case-Shiller index of housing prices

• A) increased by 125% from 1996 to 2006.
• B) fell by 38% from 2006-2011.
• C) showed an annual increase of over 7% in 2012 and early 2013.
• D) All of the above are correct.

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Definitions:

Federal Reserve Act

Legislation passed in 1913 that established the Federal Reserve System as the central bank of the United States, intended to provide the country with a safe, flexible, and stable monetary and financial system.

Central Bank

The primary monetary authority of a country, responsible for regulating the financial system, issuing currency, and controlling inflation and interest rates.

Lender of Last Resort

An institution, usually a central bank, that offers loans to banks or financial institutions that are struggling financially or are considered highly illiquid.

Financial Panics

Instances of widespread fear and anxiety among investors and the general public leading to rapid withdraws from banks or sell-offs in markets, often triggering economic downturns.