Money is destroyed when:
a. new loans are made
b. the net worth of the banking system declines.
c. loans are repaid to banks.
d. checks written on accounts at one bank are deposited in another bank.
c
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The most threatening and damaging detrimental externality at issue today is:
a. The explosion and oil spill at the Deepwater Horizon b. the continued pollution of city air due to factory emissions c. water shortages d. global warming
The following are national income account data for a hypothetical economy in billions of dollars: gross private domestic investment ($320), imports ($35), exports ($22), personal consumption expenditures ($2460), and government purchases ($470). What is GDP in this economy?
A. $3250 billion. B. $3237 billion. C. $3263 billion. D. $3290 billion.
Suggest a remedial product-tax measure for each of the following externalities if: (1) the whole world had only one government and (2) a particular nation is harmed and is acting alone. The individual situations, (a. - c.), are as follows:a. Domestic pollution from domestic consumption of a productb. Domestic pollution from foreign consumption of a productc. Global pollution from world consumption of a product
What will be an ideal response?
We have discussed the principal-agent problem as a form of moral hazard. Discuss the unique problems a bank manager faces in terms of trying to please the owners of the bank and at the same time trying to appease regulators.
What will be an ideal response?