If there are no excess reserves in the banking system and the Fed lowers the required reserve ratio, it follows that banks will now have __________, which they can use to extend loans and create new __________
A) positive excess reserves; checkable deposits
B) negative excess reserves; currency
C) positive excess reserves; currency
D) more vault cash; checkable deposits
E) none of the above
A
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Why does Congress persistently provide subsidies for ethanol, a corn-based substitute for gasoline?
a. Ethanol is less corrosive and therefore automobile engines run more efficiently and last longer when operated with ethanol. b. Production of gasoline with ethanol is more economical. c. Legislators gain political support from corn farmers and ethanol producers even though it is more expensive to produce gasoline with ethanol. d. The production and distribution of ethanol is good for the environment.
A union-sponsored television campaign urging U.S. consumers to "Look for the union label" is designed to
A) increase the productivity of union labor. B) increase the derived demand for union labor by shifting consumer preferences in favor of union-made goods. C) raise wages by restricting the supply of union workers. D) remind consumers that if they do not buy union-made goods, unions will strike.
If opening up international trade resulted in the U.S. becoming a wheat exporter, relative to the prior no-trade situation, the U.S. domestic price of wheat: a. would rise, but domestic output would fall
b. would decline, but domestic output would rise. c. would decline, as would domestic output. d. would rise, as would domestic output.
Income tax reductions can increase the profitability of human capital to households
a. True b. False