If a bank had the reserve requirement of 10 percent and excess reserves of $2,000, the largest loan it could legally extend would be:
a. $200
b. $1,800.
c. $2,000.
d. $20,000.
c
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If the value of your baseball card collection increases during a year, it would count as income under which of the following definitions of income?
a. The Fisher definition of income. b. The Haig-Simons definition of income. c. The Laffer definition of income. d. The imputed collectible return definition of income
Which one of the following transactions in a particular year is included in gross domestic product for that year?
A) Social Security payments to retirees B) The government pays a computer services company that assisted in the delivery of Social Security payments to retirees. C) A car is produced in the previous year and remains in inventory for the entire year under consideration. D) A stay-at-home parent performs housework that the family would otherwise have paid a maid $20,000 a year to perform.
Transfer payments are not part of government expenditure on goods and services because transfer payments
A) are not predictable given the nature of their appropriation and allocation. B) do not represent the purchase of a final good or service. C) are not always spent on goods produced in the U.S. D) The premise of the question is incorrect because transfer payments are part of government purchases of goods and services.
Suppose that the United States decided to subsidize a major research and development effort by U.S. firms in the semiconductor industry. Under the current rules of the WTO and GATT, the U.S. effort is
A) allowed as long as the subsidies are a small percent of the total cost. B) allowed as long as the subsidies do not involve a direct payment to the industry. C) not allowed. D) neither allowed nor disallowed. E) allowed as long as the subsidies are for developing a "precompetitive" technology.