According to Nobel Laureate, Amartya Sen, which of the following measures should not be included in a balanced scorecard for economic growth?
a. Wide-spread access to basic life-sustaining amenities.
b. Freedom to pick from a wide range of social and economic choices.
c. Better self-esteem through higher standards of living.
d. Currency appreciation due to balance of payments surpluses.
e. All the above are proper measures in the balanced scorecard approach to growth.
Question 2 - If the actual government deficit (-) is equal to -50 billion, then:
a. Fiscal policy must be expansionary.
b. Fiscal policy could be expansionary, contractionary, or neutral.
c. Monetary policy must be expansionary.
d. Fiscal policy must be contractionary.
Question 3 - Subprime mortgages are:
a. Mortgages loans to individuals who have lower credit ratings than would normally be approved by mortgage originators.
b.Mortgage loans that were correctly underwritten but encountered problems in the securitization process.
c. Mortgages that are healthy but not ready to be securitized.
d. Mortgages that carry interest rates below the U.S. prime rate.
e. None of the above.
Question 4 - If there is an active surplus (+) of +30 billion and an actual deficit (-) of -40 billion, then:
a. The full employment deficit must be -70 billion.
b. The passive deficit (-) must be -10 billion.
c. The full employment deficit (-) must be -30 billion
d. The passive deficit (-) must be -70 billion.
e. The passive surplus (+) must be +40 billion.
Question 5 - At what stage of the securitization process was moral hazard a major problem?
a. Mortgage origination.
b.Due diligence and mortgage servicing.
c. Rating securitized issues.
d. All of the above
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