A corrective tax is intended to:
a. cover the costs of negative externalities
b. increase the private benefits of consumption.
c. increase the deadweight loss caused by negative externalities.
d. increase the deadweight loss caused by positive externalities.
a
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The use of automated teller machines (ATMs) has caused some bank tellers to lose their jobs. This is an example of
a. cyclical unemployment. b. seasonal unemployment. c. frictional unemployment. d. structural unemployment.
A bank has excess reserves of $1,000 and demand deposit liabilities of $80,000 when the reserve requirement is 20 percent. If the reserve requirement is lowered to 10 percent, the bank's excess reserves will be
A) $1,000. B) $8,000. C) $9,000. D) $17,000.
When the Fed sells government securities in the open market, the money supply ________ because ________
A) decreases; banks lose liquidity, they make fewer loans and checking account deposits decrease B) increases; banks gain liquidity, they make more loans and checking account deposits increase C) increases; banks lose liquidity, they make more loans and checking account deposits increase D) decreases; banks gain liquidity, they make fewer loans and checking account deposits decrease E) none of the above
An important problem with corporations is
A) the inability of the government to control and tax the firms. B) the possibility of large liabilities for the owners. C) the separation of ownership and control. D) the difficulties with raising financial capital.