Suppose the national government increased taxes by $20 billion. The net effect on the banking system would be to:
a. Reduce bank reserves by $20 billion and reduce bank deposits by $20 billion.
b. Increase bank reserves by $20 billion and increase bank deposits by $20 billion.
c. Increase government checking accounts in the banking system by $20 billion and reduce the public's checking accounts there by $20 billion.
d. Decrease government checking accounts in the banking system by $20 billion and increase the public's checking accounts there by $20 billion.
e. Increase government checking accounts in the banking system by $20 billion and increase the public's checking accounts there by $20 billion.
.C
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Information asymmetry is present when:
A. there is risk. B. one person knows more than another. C. when both parties are lacking the same information. D. All of these statements are true.
According to the structural stagnation hypothesis, expansionary macro policy tends to lead to:
A. goods inflation. B. goods deflation. C. low exchange rates. D. asset price inflation.
Requiring that a firm engage in pollution abatement tends to reduce the firm's profits.
Answer the following statement true (T) or false (F)
The price elasticity of demand for insulin by diabetic patients is much smaller than the price elasticity of demand for leather shoes. This is an example of how the price elasticity of demand:
A. rises the less specifically the good is defined. B. falls the more a good is a necessity. C. rises the more a good is a necessity. D. falls the less specifically the good is defined.