Automatic Stabilizers
What will be an ideal response?
Deficits and surpluses are not just a result of active fiscal policy. A significant portion of the variations in government spending and tax revenues occurs "automatically," due to mechanisms built into the economic system to help stabilize it
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The additional incentive that the purchaser of a Treasury security requires to buy a long-term security rather than a short-term security is called the
A) risk premium. B) term premium. C) tax premium. D) market premium.
Game theory provides us with a general approach to understanding the behavior of firms when their choices are interdependent
a. True b. False
If loans are $69,000 . excess reserves are $1,400, and demand deposits are $80,000 . then the legal reserve requirement must be
a. 1.75 percent b. 12 percent c. 13.75 percent d. 17.5 percent e. 0.12 percent
Karen's cat causes Danny to sneeze. Karen values her cat's companionship at $300 per year. The cost to Danny of tissues and her allergy medication is $350 per year. Based on the Coase theorem,
a. Karen should pay Danny $400 so that she may keep her cat. b. Karen should pay Danny $350 for tissues and allergy medication. c. Danny should pay Karen $325 to give away her cat. d. Danny should move.