The large increase in the excess reserves held by the commercial banking system during the second half of 2008,
a. increases the likelihood of a sharp contraction in the money supply, which would increase the length and severity of the recession.
b. increases the likelihood of a rapid increase in the money supply, potentially leading to future inflation.
c. is merely a continuation of the trend present since 1990.
d. reduces the ability of banks to extend additional loans.
B
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If the government wants to minimize the welfare loss of a tax, it should tax goods with more inelastic demands or supplies
Indicate whether the statement is true or false
If hiring the 6th worker increases total product by 7 units and the price of each unit is $2,
a. the firm should not hire the 6th worker as MB
Country X subsidizes industry A. A worldwide recession has hit and Country X has decided to export Good A worldwide, selling the product for less than it costs to produce it. This is
A. the infant industry argument. B. comparative advantage argument. C. a regional trade bloc. D. dumping.
The diagram suggests that:
A. X and Y are both inferior goods.
B. X and Y are both normal goods.
C. X and Y are substitute goods.
D. X and Y are independent goods.