1. What is the crowding - out effect? example?
2. Why were those who took out hybrid loans at far greater risk of foreclosure when the Fed began raising interest rates?
3. How are each of the following events likely to affect the value of the dollar relative to the euro?
a. Interest rates in the European Union increases relative to those in the United States.
b. The European Union price level rises relative to the U.S. price level.
c. The European central bank intervenes by selling dollars on currency markets.
d. The price level in the United States falls relative to the price level in Europe.