(Consider This) The Fed is like a sponge in that it can:
A. clean up economic problems just as one would wash dirt off a car.
B. squeeze new reserves into the banking system, or soak up reserves if the banking reserve
"bowl" is too full.
C. wipe away inflation when used with the "soap" of fiscal policy.
D. wash the "windows" of the banking system so that monetary policy is more transparent.
B. squeeze new reserves into the banking system, or soak up reserves if the banking reserve
"bowl" is too full
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Because of the monopoly power that comes with being the only firm to produce a product, it is always more efficient to have multiple firms in an industry.
Answer the following statement true (T) or false (F)
If a perfectly competitive market is in equilibrium and market demand decreases, which of the following would happen?
a. both producer and consumer surplus would increase b. both producer and consumer surplus would decrease c. producer surplus would decrease and consumer surplus would increase d. producer surplus would increase and consumer surplus would decrease e. producer and consumer surplus would remain unchanged
If the supply of health-care services is highly inelastic and larger government subsidies lead to an increase in the demand for the services,
a. the prices of health-care services will rise by only a small amount, but the quantity supplied will increase substantially. b. the prices of health-care services will rise substantially, but the quantity supplied will increase by only a small amount. c. both health-care prices and the quantity of the services supplied will increase substantially. d. the prices of health-care services will decline, but there will be only a small change in the quantity supplied.
Instruments that can be used to control overuse of a common resource include
A. privatizing the resource. B. taxes. C. standards. D. all of the above