Which of the following is an example of using money as a store of value?
A) paying for a new dress with a credit card
B) paying cash for a new automobile
C) paying rent with a check on a demand deposit
D) keeping $200 on hand for an emergency
D
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Which of the following would cause both the equilibrium price and equilibrium quantity of barley (assume that barley is an inferior good) to increase?
A) a drought that sharply reduces barley output B) an increase in consumer income C) a decrease in consumer income D) unusually good weather that results in a bumper crop of barley
Which of the following programs to alleviate poverty would be most favored by philosopher Robert Nozick and why?
a. A negative income tax because it would maximize the minimum income of members of society. b. An Earned Income Tax Credit (EITC) because a policy that rewards the working poor would be the most just. c. An in-kind transfer program because it would maximize the total utility of all members of society. d. None of the programs would be favored because each of them forcibly redistributes income that was fairly, if not equally, earned.
Which of the following might be a method that the government could use to correct a negative externality?
A) an effluent fee on waste from the production of goods that create negative externalities B) government subsidies to producers of goods that create negative externalities C) financing additional production of goods that create negative externalities D) encouraging overallocation of resources of production of goods that create negative externalities
If the money multiplier is 2.5 and the Fed buys $8 million in securities on the open market, transaction deposits could potentially
A. decrease by $25 million. B. increase by $25 million. C. decrease by $20 million. D. increase by $20 million.