This year a firm produces $100 million worth of cars this year and sells $102 million worth of cars. Which of the following is true?
A) GDP for this year will increase by $100 million.
B) GDP for this year will increase by $102 million.
C) Inventory investment will increase by $2 million.
D) GDP for this year will increase by $202 million.
E) The premise of the question is wrong because it is impossible for a firm to sell more than it produces in a given time period.
A
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How can the Fed reduce the implicit tax on banks resulting from reserve requirements?
A) lowering the discount rate B) paying interest on reserves C) reducing the federal funds rate D) increasing the federal funds rate
Assuming that chicken and beef are substitutes, a decrease in the price of beef, other things being equal, will:
a. decrease the demand for beef. b. increase the demand for chicken. c. decrease the demand for chicken. d. increase the demand for beef.
What are the three goals of the Employment Act of 1946?
A. full employment, better schools, and lower income taxes B. keep the peace, improve public education, and protect the environment C. full employment, price stability, and economic growth D. improve the education system, provide more job training, and expand the number of government jobs
All of the following involve a moral hazard problem EXCEPT
A) an individual driving carelessly after buying a comprehensive insurance policy for a Ford Pinto. B) the IMF bailing Mexico out of a financial crisis, with promises to do the same for other nations that might face financial problems. C) making regular visits to your doctor because you know that you have full healthcare coverage. D) the requirement of banking institutions that owners invest a substantial portion of their own capital in their bank. E) membership in FDIC (Federal Deposit Insurance Corporation) by your local bank.