A production subsidy combined with free trade
A) has the same deadweight costs as a tariff.
B) has only consumption deadweight costs.
C) has only production deadweight costs.
D) None of the above.
C
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Moral hazard is a problem in providing deposit insurance because insured banks are
A) more likely to make bookkeeping errors. B) overly cautious due to extra regulations adopted by the FDIC. C) more likely to provide bank managers with lavish perquisites. D) encouraged to take on more risk.
If Stimpson University increases tuition in order to increase its revenue, it will:
a. not be successful if the demand curve slopes downward. b. be successful if demand is elastic. c. be successful if demand is inelastic. d. be successful if supply is elastic. e. be successful if supply is inelastic.
The productivity gains from computer revolution appear to be small, possibly because we have not yet learned how to measure productivity in service sectors?such as banking, law, and medicine?that have benefited the most
Indicate whether the statement is true or false
The figure above shows the market for bank reserves in Futureland. If the Bank of Futureland undertakes an open market purchase of government securities that changes the quantity of reserves by $25 billion, then the federal funds rate will
A) fall to 4 percent a year.
B) remain at 6 percent a year.
C) rise to 8 percent a year.
D) change, but more information is needed to determine by how much.
E) None of the above answers is correct.