A central bank's balance sheet will categorize the following as liabilities:
A. foreign exchange reserves.
B. securities.
C. currency.
D. loans.
Answer: C
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The cost of producing an additional unit of a good or service that falls on people other than the producer is the marginal
A) external cost. B) private cost. C) social cost. D) social benefit. E) None of the above answers is correct.
An increase in first-period income results in
A) an increase in first-period consumption, an increase in second-period consumption, and an increase in saving. B) an increase in first-period consumption, a decrease in second-period consumption, and an increase in saving. C) a decrease in first-period consumption, an increase in second-period consumption, and an increase in saving. D) an increase in first-period consumption, an increase in second-period consumption, and a decrease in saving.
With complete crowding out, an increase in government spending
A) is completely offset by a reduction in private spending. B) is matched by an increase in private spending. C) results in an increase in aggregate supply. D) results in an increase in aggregate demand.
In the area of taxation, the trade-off between equity and efficiency
A. never occurs since efficient taxes are often the most progressive. B. is relevant as efficient taxes are often regressive. C. is irrelevant. D. is relevant because efficient taxes are often progressive.