Consider the two graphs above. Suppose that allowable deductions from taxable business income are increased. This would ________ the desired level of the capital stock, as depicted in graph ________
A) increase; B
B) increase; A
C) decrease; B
D) decrease; A
A
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What is meant by the term "outside lags"?
What will be an ideal response?
An indication that Insurance companies anticipate adverse selection is
a. they do not require a deductible b. they classify clients into different risk types according to their claim history c. they do not classify clients into different risk types according to pre-existing conditions d. they do not require a co-payment
If the price of ice cream increases and the quantity demanded decreases, economists would describe this as:
a. a change in demand b. a change in quantity demanded. c. a change in consumer income. d. a change in one of the variables that shift demand.
Suppose the banking system as a whole has $600 billion in deposits and $66 billion in reserves, with a reserve ratio of 11 percent. What happens to the stock of money if the Fed lowers reserve requirements by changing the reserve ratio to 10 percent?