By affecting the amount of reserves in the banking system, the Fed can
A. increase government purchases.
B. affect the size of the money supply.
C. reduce government purchases.
D. change the marginal tax rates.
Answer: B
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Suppose a tax equal to the value of the external cost of producing car batteries is imposed by government on all car battery manufacturers. All of the following will result from the tax except
A) an increase in demand for car batteries. B) a decrease in the market supply of car batteries. C) an increase in the equilibrium price of car batteries. D) a decrease in the equilibrium quantity of car batteries produced and consumed.
Your real wealth is measured as the
A) amount of assets you have in dollar terms. B) amount of money you have. C) amount of goods and services your wealth will buy. D) amount of goods you have divided by the price level.
Two important roles of government in the economy are to safeguard private property and enforce contracts
a. True b. False
Real GDP is:
(a) GDP valued at current market prices. (b) GDP valued at base year prices. (c) GDP valued at current input prices. (d) The nominal value of GDP.