Commercial banks are able to create money because
What will be an ideal response?
the public is willing to accept bank liabilities in exchange for other goods.
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When the United States sends money to the Philippines to help typhoon survivors, the transaction is recorded in
A) the financial account. B) the capital account. C) the current account. D) the foreign exchange account.
The difference between exports and imports of goods is the
A) balance of trade. B) balance of payments. C) balance of accounts. D) balance of paying.
If price-taking firms are required to install wet scrubbers on their chimneys to meet EPA regulations and their costs increase as a result, we would expect
a. demand for the product to fall b. the market supply curve to shift to the left c. the long-run economic profit of individual firms in the industry to fall d. the short-run economic profit of individual firms in the industry to remain unchanged e. short-run profits to rise as the industry raises price more than the cost of pollution
Which of the following should be held constant when calculating an income elasticity of demand?
a. the price of the good b. prices of related goods c. tastes d. All of the above should be held constant.