Which of the following is a tool of the Federal Reserve System?
A. Encouraging employment by lending money at a discounted rate to firms that are in danger of having to make layoffs.
B. Reducing the burden of household debt by capping credit card and other loan interest rates at reasonable levels
C. Buying or selling stocks of publicly traded corporations in order to stabilize the stock market
D. Buying or selling bonds in the open market in order to stimulate the economy during recessions and prevent inflation
Answer: D
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The textbook authors claim
A) diabetics don't need insulin. B) diabetics don't want insulin. C) diabetics face no substitutes for insulin. D) diabetics can't find insulin at a fair price. E) none of the above.
In a circular-flow diagram, the saving and taxation "pipes" are carrying
A) injections to firms. B) injections to households. C) leakages from firms. D) leakages from households.
Which of the following is TRUE about firms organized along functional lines?
a. Workers develop functional expertise b. Workers can easily share information within their division c. They foster the exploitation of economies of scale d. All of the above
The benefits-received principle of taxation is not often used because
A. it leads to less equality in the after-tax distribution of income. B. it leads to an overproduction of public goods. C. it is difficult to determine the values individual taxpayers place on goods and services that are produced using tax revenue. D. if tax payments are linked to the benefits received, taxpayers tend to overstate the benefits that they receive from public goods.