One of the serious drawbacks of the deposit insurance system in the United States is that:
A. bank failures continue to occur regularly.
B. the system took away the Federal Reserve's ability to conduct open-market operations.
C. if insured intermediaries make many bad loans, the taxpayers may be responsible for covering the losses.
D. the system took away the Federal Reserve's ability to change reserve requirements.
Answer: C
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When the production of a good creates an external cost, one method of achieving the efficient allocation is to impose a tax such that
A) MC + tax = MSC. B) MC - tax = MSB. C) MB + tax = MSC. D) MB - tax = MSB.
Financial markets are
A) institutions that make loans to borrowers and obtain funds from savers. B) organized exchanges where securities and financial instruments are bought and sold. C) organized exchanges where currencies are traded. D) institutions that regulate financial instruments.
One of the principal factors behind the U.S. trade deficits of the 1990s has been
A. slow growth and recession in many important trading partners. B. rapid growth and inflation in many important trading partners. C. significant depreciation of the dollar. D. rising real interest rates in the United States.
Who pays a corporate income tax?
a. owners of the corporation b. customers of the corporation c. workers of the corporation d. All of the above are correct.