The FDIC fee system encourages depository institutions to
A. operate their institutions in too conservative a fashion.
B. seek only a modest rate of return.
C. make riskier loans than they would otherwise.
D. reject loans that probably would have been profitable.
Answer: C
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Should autonomous consumption fall by one dollar, the effect of this on equilibrium income can be offset if government expenditure
A) falls by one dollar. B) rises by one dollar. C) falls by 1/(1 - c) dollars. D) rises by 1/(1 - c) dollars. E) rises by c/(1 - c) dollars.
Countercyclical fiscal policy refers to
a. any fiscal policy that cycles between budget surpluses and budget deficits b. the use of taxes and government spending to keep the economy close to potential GDP in the short run c. any fiscal policy that is employed during a business cycle d. the use of open market purchases of bonds to keep the economy close to potential GDP in the short run e. the use of changes in tax rates to keep the economy at potential output in the long run
The law of demand implies that the demand curve is Question 25 options:
A. downward sloping. B. upward sloping. C. downward sloping at high prices and upward sloping at low prices. D. upward sloping at high prices and downward sloping at low prices.
Refer to the information provided in Figure 6.5 below to answer the question(s) that follow.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is CD. Molly's income is $75, the price of a DVD is $3 and the price of a CD is $5. At point D, she is buying ________ DVDs and ________ CDs.
A. 0; 15 B. 25; 0 C. 50; 30 D. 25; 15