If the Fed raises the reserve requirement on deposits from 15 percent to 20 percent, what would happen to the money supply?
A. It would decrease.
B. It would increase.
C. It would remain unchanged.
D. It depends on the value of interest rates.
Answer: A
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Which of the following is an argument that the incidence of corporate taxation falls entirely on consumers?
A) Corporations pass their tax burdens on to consumers by charging higher prices equal to the amount of the tax. B) Corporations pass their tax burdens on to consumers because consumers ultimately work for the corporations. C) Corporations always evade taxes so that consumers ultimately bear the tax burdens as taxpayers. D) Most taxes on consumers are collected by corporations through sales taxes.
The sum of the marginal propensity to consume (MPC) and the marginal propensity to save (MPS) equals: a. 0.5
b. the multiplier. c. the slope of the consumption function. d. 1.0. e. the slope of the saving function.
The reason individual homeowners usually do not hire a private contractor to fill the potholes on their street is because
a. there are positive externalities associated with the potholes b. the value to the neighborhood exceeds the cost of repair c. it costs them more than the benefits they derive d. they do not trust the government e. there are negative externalities associated with the repair
Critics of unions argue that unions cause the allocation of labor to be inefficient and inequitable
a. True b. False Indicate whether the statement is true or false