A demand curve to remain unit elastic along its entire length should
a. cross the X axis.
b. touch the X axis but not the Y axis.
c. never touch either the X or the Y axis.
d. touch the Y axis but not the X axis.
c
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Debt is to deficit as
a. money is to income. b. flow is to stock. c. rent is to dividend. d. property is to wealth.
According to the Keynesian model, which of the following policies would be most appropriate during a period of rapid inflation?
a. a tax cut b. a budget deficit c. a budget surplus d. an increase in the money supply
What problem does the government have that makes price regulation less than an ideal solution?
a. There is no effective way to enforce price regulation. b. The government cannot tell what price a firm is charging. c. Regulators frequently will not have the information they need to set prices. d. Regulation often will lead to lower costs.
The Treasury usually requires most businesses to regularly deposit taxes withheld from employees into accounts at designated commercial banks. On a regular basis, the funds in these accounts are transferred to the Treasury's account at the Fed. Discuss what is happening to the balance sheet of the banking system as the businesses are making deposits and these tax accounts are increasing. What happens to the banking system's balance sheet when the funds are transferred to the Fed?
What will be an ideal response?