An individual deposits $12,000 in a commercial bank. The bank is required to hold 10% of all deposits on reserve. The deposit increases the loan capacity of the bank by
A. $9,600.
B. $6,000.
C. $10,800.
D. $11,000.
Answer: C
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An efficient tax is
A) a tax that raises a maximum amount of revenue. B) a tax that imposes a small excess burden relative to the tax revenue that it raises. C) a tax that imposes an equal tax burden on buyers and sellers. D) a tax that is used to fund research and development of new technology.
The international unit of accounting used by the IMF is the
A) euro. B) special financial right. C) special drawing right. D) dollar.
According to purchasing-power parity which of the following would happen if a country raised its money supply growth rate?
a. its nominal exchange rate would fall b. its real exchange rate would fall c. its real net exports would rise d. All of the above would happen.
An example of a positive statement is:
A) The rate of unemployment is 4 percent. B) A high rate of economic growth is good for the country. C) Everyone in the country needs to be covered by national health insurance. D) Baseball players should not be paid higher salaries than the president of the United States.