Assume we have a simplified banking system in balance-sheet equilibrium. Also assume that all banks are subject to a uniform 10 percent reserve requirement and checkable deposits are the only form of money. A commercial bank receiving a new checkable deposit of $100 would be able to extend new loans in the amount of:
A. $10.
B. $90.
C. $100.
D. $1,000.
Answer: B
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Decreases in consumption, investment, or net exports caused by an increase in government purchases are known as
A) strategic substitution. B) crowding out. C) diminishing returns. D) demand-side effects.
Consider a system in which a person earning $10,000 pays $1,000 in taxes, a person earning $25,000 pays $2,000 . and someone earning $60,000 pays $4,000 . What type of tax is this?
a. progressive b. proportional c. regressive d. property tax e. one based on the benefits principle of taxation
Suppose that a family saves and borrows to buffer itself against changes in income. These actions relate to which problem in measuring inequality?
a. in-kind transfers b. negative income tax c. transitory versus permanent income d. economic mobility
Consumer surplus is equal the area below the _________ and above___________
A. Price; Supply Curve B. Demand Area; Price C. Demand Curve; Supply Curve D. Price; Demand Curve E. Supply Curve; Demand Curve