Primary liabilities of the Federal Reserve include
a. Federal Reserve notes.
b. U.S. government securities.
c. loans to banks.
d. reserve deposits by banks.
e. Both a and d
E
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The most important determinant of the price elasticity of demand for a good is
A) the share of the good in the consumer's budget. B) whether the good is a necessity or a luxury. C) the definition of the market for a good. D) the availability of substitutes for the good.
Refer to Scenario 16.3. What is Sam's marginal rate of substitution of tee shirts for candy at the current distribution?
A) 2. B) 7/5. C) 5/7. D) It is impossible to determine without the prices of each commodity.
A tax is sometimes used by government to correct the problems associated with
A) negative externalities. B) positive externalities. C) internal benefits. D) external benefits.
A decrease in the supply of money will lead to a(n)
A) increase in equilibrium real GDP and an increase in the equilibrium interest rate. B) increase in equilibrium real GDP and a decrease in the equilibrium interest rate. C) decrease in equilibrium real GDP and an increase in the equilibrium interest rate. D) decrease in equilibrium real GDP and a decrease in the equilibrium interest rate.