The rate at which banks can borrow excess reserves from other banks is equal to
A) the discount rate.
B) the required reserve ratio.
C) the interest rate paid on reserves held with the Fed.
D) none of the above.
D
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Two duopoly firms that sell an identical good form a cartel. They decide to collude and fix the price of their good. In this prisoners' dilemma type situation, the likely outcome is
A) both will cheat. B) neither one will cheat. C) only one will cheat. D) It is impossible to say.
What were the principal causes of the U.S. government budget deficits of the 1980s? How did these budget deficits lead to the twin deficits? According to the Ricardian equivalence proposition, should twin deficits arise as a result of tax cuts?
What will be an ideal response?
Automatic stabilizers stabilize the level of real GDP because:
A. Congress quickly changes spending and tax revenue. B. federal expenditures and tax revenues change as the level of real GDP changes. C. the spending and tax multiplier are constant. D. wages are controlled by the minimum wage law.
A firm that has a great deal of control over the price of a good is said
A) to function in a black market. B) to create an externality. C) to have monopoly power. D) to be in an antitrust position.