When a bank makes loans with excess reserves, it
a. creates money.
b. destroys money.
c. alters the composition of M1.
d. leaves the money supply unchanged.
a
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Which of the following are ways in which corporations can reduce their U.S. tax burdens?
A) taking advantage of deductions and credits B) shifting foreign profits to overseas subsidiaries C) deducting past losses from income tax in profitable years D) all of the above
A reason why it is difficult for developing countries to maintain a cartel is that
A) the elasticity of demand for a cartel's output decreases over time. B) producers in the cartel have an economic incentive to cheat. C) economic profits discourage other producers from entering the industry. D) producers in the cartel have the motivation to lower prices but not to raise prices. E) tariffs allow producers in the cartel to produce items that make no profit.
The impossible trinity includes ________
A) capital controls, a fixed exchange rate and an independent monetary policy B) free capital mobility, a flexible exchange rate and an independent monetary policy C) free capital mobility, a fixed exchange rate and an independent monetary policy D) free capital mobility, a flexible exchange rate and constraints on monetary policy
In the presence of asymmetric information, a contingent contract
A) achieves production efficiency. B) can lead to opportunistic behavior on the part of the agent. C) is impossible to write. D) will result in the principal earning all of the profit.