The opportunity cost to a city for using local tax revenues to construct a new park is the:
a. best alternative foregone by building the park.
b. dollar cost of constructing the new park.
c. dollar cost of the old park.
d. increased taxes necessary to pay for maintenance of the new park.
a
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Everything else held constant, an increase in the required reserve ratio will mean ________ in the M2 money multiplier and ________ in the M2 money supply
A) an increase; an increase B) an increase; a decrease C) a decrease; an increase D) a decrease; a decrease
One problem with the effectiveness of Pigovian taxes is:
A. the tax does not directly compensate those who are affected by the externality. B. knowing whether to impose it on the consumer or producer. C. the tax is always used to benefit those who bear the externalities. D. none of the above is a problem of Pigovian taxes.
Which of the following is an example of market governance?
a. A firm vertically integrating backward to own the necessary inputs b. A firm entering into a contract with input suppliers. c. A school recruiting a part-time teacher to cover for a permanent employee who falls very ill. d. A school requesting its permanent employees to cover for a teacher who suddenly falls ill.
If the reserve ratio is designated by "r," the amount of deposits a bank can hold as excess reserves is equal to 1 / (1 - r).
Answer the following statement true (T) or false (F)