To offset the effect of households and firms deciding to hold less of their money in checking account deposits and more in currency, the Federal Reserve could
A) raise the required reserve ratio.
B) buy Treasury securities.
C) raise the discount rate.
D) lower bank taxes.
B) buy Treasury securities.
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Excise taxes _____
a. can be ad valorem taxes b. can be unit taxes c. are taxes placed on particular types of goods d. all of the above e. b and c
The two most important rationales for government intervention in non-monopolistic markets are
A) market failure and asymmetric information. B) substandard products and job creation for public employees. C) job creation and income maintenance. D) unfair pricing and usury.
Market forces encourage discrimination in the case of
a. statistical discrimination only b. employee and customer prejudice only c. employer prejudice only d. statistical discrimination and employee or customer prejudice e. employer prejudice and statistical discrimination
Suppose two corporate bonds with similar risk pay different rates of return. The process of arbitrage should:
A. not affect their rates of return. B. increase the return on the asset with the higher rate of return as the demand for it increases. C. increase the gap between the two rates of return. D. eventually equalize their rates of return.