For the economy to be in equilibrium, the following condition must be satisfied: G + I = S + T.
Answer the following statement true (T) or false (F)
True
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The Fed conducts an open market operation and buys $50,000 of government securities from Commerce Bank. The desired reserve ratio is 25 percent. What is the change in Commerce Bank's total reserves and its excess reserves?
What will be an ideal response?
The figure above shows a nation's production possibilities frontier. In the figure, point B shows
A) an unattainable point. B) an attainable point. C) a point with a free lunch. D) a point with no trade off. E) a point at which there are unemployed resources.
Under rate of return regulation, a regulated firm has an incentive to
A) use an efficient amount of capital. B) set its price equal to its marginal cost. C) hide losses from bad debts. D) inflate its costs.
A quota is one example of a protectionist policy.
a. true b. false