Zero lower bound refers to:
A. a bank with zero excess reserves.
B. a situation where there is little to no inflation
C. the rate that the Federal Reserve is currently paying on bank reserves
D. a level below which the Fed cannot further reduce short-term interest rates
Answer: D
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Two companies, Dirty Inc. and Filthy Inc., each of which has access to 5 different production processes, each of which has a different cost and produces a different amount of pollution. The daily costs of the processes and the number of tons of smoke emitted are shown in the table below. Process(smoke/day) A(4 tons/day) B(3 tons/day) C(2 tons/day) D(1 ton/day) E(0 tons/day) Cost to Dirty Inc. ($/day) $110$200$380$740$1,460 Cost to Filthy Inc. ($/day) $400$430$490$580 $700If pollution is unregulated, then a total of ________ tons of smoke will be emitted each day.
A. 4 B. 2 C. 1 D. 8
When the federal government uses taxation and purchasing actions to stimulate the economy it is conducting
A. monetary policy. B. fiscal policy. C. employment policy. D. incomes policy.
Use the following graph to answer the next question.
Suppose the economy is in equilibrium at point C. A personal income tax cut would most likely
A. move the economy upward from point C along AD1. B. cause the AS curve to shift to the right. C. move the economy downward from point C along AD1. D. move the economy from point C toward point B.
Two-dimensional graphs have a horizontal and a vertical axis and are used in economics to illustrate
A) relationships between two economic variables. B) a pie chart. C) a flow chart. D) one variable.