When the economy is in the liquidity trap,
A) velocity is constant.
B) monetary policy is impotent.
C) fiscal policy is impotent.
D) income is zero
B
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A new law passed in Bonland requires all bikers to wear helmets while riding. It also states that those who do not wear helmets while riding will be punished. This law is likely to lead to a(n) ________
A) decrease in government expenditure B) increase in government expenditure C) decrease in tax rates D) increase in the overall price level
Large and long-continued increases in the demand for electricity will tend to result in
A) a higher cost of generating electricity. B) a higher price for electricity but no increase in the cost of generating it. C) a reduction in the quantity of electricity demanded as a consequence of higher prices. D) an increase in the quantity of electricity demanded and hence a decrease in its price.
One difference between net domestic product and national income is that
A. national income includes government and business transfer payments. B. net domestic product includes depreciation. C. net domestic product includes indirect business taxes and transfers. D. net domestic product doesn't include Social Security taxes or corporate retained earnings.
The Intracoastal Bank has $5 million in deposits and $500,000 in reserves. If the required reserve ratio is 5%, excess reserves are equal to
A. zero. B. $125,000. C. $250,000. D. $500,000.