A regressive tax is one in which the average tax rate falls as income rises
a. True
b. False
Indicate whether the statement is true or false
True
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A bank creates money when it:
a. gets new checkable deposits which the depositor formerly held as cash. b. has a loan paid off, which creates excess reserves for the bank. c. makes a loan from its excess reserves. d. holds back excess reserves because of an increase in the required reserve ratio. e. gets more excess reserves because of a decrease in the required reserve ratio.
Which of the following is most likely to result in an increase in crony capitalism?
a. a reduction in entry barriers and an increase in the competitiveness of markets. b. an increase in government spending and growth of government regulation c. a reduction in the size of government d. an increase in the share of the population voting in elections
If the price of a variable resource increased for the typical firm, there would be:
A. A downward shift in the AVC curve B. An upward shift in the AFC curve C. A downward shift in the AFC curve D. An upward shift in the MC curve
Refer to the graph below, which shows the supply and demand for British pounds. D1 and S1 represent the initial demand and supply curves. If there is a large increase in the number of American tourists visiting Britain because of a major event like the Olympics or the World Cup, then what should the British government do if it wants to fix the exchange rate at its initial level?
A. Shift D1 to D2
B. Shift D1 to D3
C. Shift S1 to S2
D. Shift S1 to S3