The Fed influences the interest rate by using which of the following tools?
i. open market operations
ii. taxes on bank accounts
iii. changes in required reserve ratios
A) i only B) ii only C) iii only D) Both i and iii E) i, ii and iii
D
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Which of the following goods is rival and excludable?
a. an uncongested toll road b. an uncongested nontoll road c. a congested nontoll road d. a congested toll road
The law of diminishing marginal returns
A) results in average total cost (ATC) and marginal cost (MC) curves eventually increasing at an increasing rate. B) results in MC but not ATC curves eventually increasing at an increasing rate. C) causes average fixed costs to decline continuously as output increases. D) causes the difference between average total cost and average variable cost to shrink as output increases.
Which of the following best explains the increase in national income that results from equal increases in government spending and taxes?
A) Consumers do not reduce their spending by full amount of the tax increase B) The government purchases some goods that consumers would have purchased on their own anyway C) Consumers believe all tax cuts are transitory D) The increase in government spending causes a decrease in investment E) Consumers are aware of tax increases but not of increase in government spending
The payroll tax for income earners at low income levels in the United States is
A. progressive. B. uniform. C. proportional. D. regressive.