Assuming that households do not change their cash holdings and banks loan out all of their excess reserves, if the required reserve ratio (RRR) is 20 percent and the Fed purchases $2,000 worth of bonds from banks, how much money will be eventually created?
a. $1,800
b. $2,000
c. $10,000
d. $18,000
e. $20,000
C
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The marginal social cost of production is:
A. the sum of the total cost to the producer and the total external cost. B. the sum of the marginal cost to the producer and the total external cost. C. the sum of the total cost to the producer and the marginal external cost. D. the sum of the marginal cost to the producer and the marginal external cost.
Define the following terms and explain their importance to the study of macroeconomics: a. open economy b. closed economy c. budget deficits and trade deficits d. international capital flows
What will be an ideal response?
The share of the burden of an emissions tax on output borne by the consumer of the polluting output will rise as
A. the tax rises. B. demand elasticity falls. C. demand elasticity rises. D. the tax falls.
If the demand-side effects of supply-side tax cuts are greater than the supply-side effects, then we can expect the result to be a(n)
A. decrease in output and prices. B. decrease in output and an increase in prices. C. increase in output and prices. D. increase in output and a decrease in prices.