If the Fed increases the required reserve ratio, how will this affect excess reserves and the money supply?
A. Both will increase.
B. Excess reserves increase and the money supply decreases.
C. Both will decrease.
D. Excess reserves decrease and the money supply increases.
Answer: C
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A fifty cent tax imposed on a pack of cigarettes is _____
a. a unit tax b. an ad valorem tax c. a retail sales tax d. relatively cheap
The official poverty income threshold in the United States is
A. based on the cost of a budget that includes food, clothing, and shelter. B. never adjusted for the effects of inflation. C. the same for all families independent of the number of people in the family. D. calculated as three times the cost of a minimally acceptable diet for a family.
What will happen when a monopolistic competitive firm increases its price?
a. It will lose all its customers like a perfect competition firm. b. It will lose only a few of its customers like a monopolist. c. It will lose fewer customers than under perfect completion but more than a monopolist. d. It will not lose any customers.
External benefits cause the market to:
A. underallocate resources. B. be more efficient. C. set excessively high prices. D. have persistent shortages.