Under a progressive tax system:
a. only the rich are taxed
b. higher marginal taxes are imposed on higher incomes.
c. lower taxes are imposed on everyone.
d. everyone pays the same percent of their income for tax.
b
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Answer the next question on the basis of the following consolidated balance sheet of the commercial banking system. Assume that the reserve requirement is 10%. All figures are in billions.Assets (billions of dollars)Liabilities & Net Worth (billions of dollars)Reserves$60Checkable deposits$600Securities140Stock shares260Loans260 Property400 Suppose the Fed wants to reduce the money supply by $400 billion to drive up interest rates and dampen inflation. Assuming that the money multiplier is operating to full effect, to accomplish the desired reduction, the Fed could ________.
A. sell $40 billion of U.S. securities to the banks B. buy $40 billion of U.S. securities from the banks C. buy $20 billion of U.S. securities from the banks D. sell $20 billion of U.S. securities to the banks
What can income elasticity of demand tell us about the nature of a good?
What will be an ideal response?
The federal funds rate is the
a. percentage of face value that the Federal Reserve is willing to pay for Treasury Securities. b. percentage of deposits that banks must hold as reserves. c. interest rate at which the Federal Reserve makes short-term loans to banks. d. interest rate at which banks lend reserves to each other overnight.
An increase in the quantity of tea demanded occurs if:
A. the income of tea drinkers increases. B. the price of coffee rises. C. the price of the tea falls. D. the population of tea drinkers grows.