Which of the following is an example of consumer sovereignty?
a. People must pay a portion of their wages to social security.
b. Car manufacturers change vehicle body styles in response to sales.
c. Federal tax rates are based on a person’s earnings.
d. Companies often donate products to help with disaster relief.
b. Car manufacturers change vehicle body styles in response to sales.
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Going from left to right on the aggregate demand curve, real GDP _____.
(A) Falls as price level falls (B) Rises as price level rises (C) Rises as price level falls (D) Falls as price level rises
A bank has excess reserves of $5,000 and demand deposits of $50,000; the required reserve ratio is 20 percent. If the reserve ratio is raised to 25 percent, then this bank can lend a maximum of:
A. $1,000 B. $1,500 C. $2,000 D. $2,500
When the production of a good creates an external cost, to achieve the efficient quantity governments can set taxes (T) such that ________
A) MSC = MC + T B) MC = MSC + T C) T = MC + MSC D) MSC = MC - T
"Shifting resources from the production of other goods to the production of national security goods may not increase a nation's national security.". Explain