Suppose aggregate demand fell. In order to stabilize the economy, the government might
a. decrease the money supply.
b. decrease government expenditures.
c. decrease taxes.
d. do nothing.
c
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In the market for bank reserves, the supply of reserves is
A) an upward sloping curve. B) a downward sloping curve. C) a vertical curve. D) none of the above.
Which of the following is a financial contract in which a firm agrees to repay the amount borrowed plus interest?
a. Corporate bond b. Certificate of deposit c. Municipal bond d. Stock
One way to solve the free-rider problem is:
A. tax everyone an equal amount for the good. B. have the government provide the good at a certain cost. C. make the good or service more excludable. D. tax those who truly value the good.
Which of the following could increase the demand for dollars in the foreign exchange market?
a. a higher inflation rate in foreign countries b. higher interest rates in foreign countries c. higher prices in the United States d. a depreciation of the dollar e. an appreciation of other currencies