Refer to the scenario above. Which family pays the lowest percentage of its income as taxes if the government follows a progressive tax system?
A) The first household
B) The second household
C) The third household
D) The fourth household
A
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If the supply of iPods increases, then
i. the supply curve for iPods has shifted rightward. ii. the price of iPods has decreased. iii. there will be a movement upward along the iPod supply curve. A) i only B) i, ii and iii C) i and ii D) ii and iii E) i and iii
Assume that excess reserves are $10 million, the required reserve ratio is 10 percent, and total reserves are $145 million. Demand deposits are
A) $135 million. B) $1.35 billion. C) $1.35 million. D) $1.45 billion.
The European Central Bank aims to maintain price stability. They aim to keep inflation rates below, but close to, over the medium term:
(a) 3%. (b) 2%. (c) 1%. (d) They don't have a pre-defined rate.
Give a hypothetical example that shows how monetary policy could fail because of bad timing.
What will be an ideal response?