If individuals suddenly increase their withdrawals from the banking system, the federal funds rate should:
A. increase as bank reserves increase.
B. decrease as bank reserves increase.
C. decrease as bank reserves decline.
D. increase as bank reserves decline.
Answer: D
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If the current account has a positive balance of $100 and the capital and financial account has a negative balance of $90, there will be ________ in official reserves of ________
A) a decrease; $10 B) an increase; $10 C) an increase; $190 D) a decrease; $190
If there is instability in the demand for commodities,
A) a monetary policy of fixed interest rates will perform better than a policy of holding the real money supply fixed. B) a countercyclical money-supply policy will cause large swings in interest rates. C) a fixed money supply policy will perform better than countercyclical changes in money supply. D) a fixed money supply policy will stabilize interest rates.
No tax can lead the economy to higher levels of efficiency
a. True b. False Indicate whether the statement is true or false
Which of the following programs would redistribute consumer surplus in favor of those with less surplus in an otherwise free market economy?
A. Providing welfare payments to the poor that are paid for by income taxes B. Eliminating estate taxes C. Ensuring that the market results in an efficient outcome D. Enforcing existing property rights