While deposit insurance was designed to make the banking industry more stable, it contributed to the banking crisis of the 1980s because:
a. the FDIC only insured commercial banks
b. the ceiling on insured deposits was too low.
c. too many banks were insufficiently insured.
d. depositors became too complacent about the risks that the banks were taking.
e. unsafe banks were "kicked out" of the deposit insurance system.
d
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The incentive to consume tax-deductible goods, instead of nondeductible goods, increases when
a. marginal tax rates are high. b. marginal tax rates are low. c. the inflation rate is low and relatively stable. d. This is a trick question: the consumption of tax-deductible goods is not affected by marginal tax rates.
Karole's income rises from $50,000 to $75,000 and her income tax increases from $8,000 to $9,500.Her average tax rate is 6%
a. True b. False Indicate whether the statement is true or false
An example of physical capital is:
A. a tractor. B. a high-yield seed varietal. C. a farmer. D. All of these are examples of physical capital.
A firm with market power in pricing faces a
A. downward-sloping demand curve. B. downward-sloping supply curve. C. supply curve parallel to the horizontal axis. D. flat demand curve.