Taxes levied on sellers and taxes levied on buyers are equivalent
a. True
b. False
Indicate whether the statement is true or false
True
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A decrease in the reserve requirement
A) decreases the money supply, which leads to decreased interest rates and a rise in investment spending. B) increases the money supply, which leads to increased interest rates and a fall in investment spending. C) increases the money supply, which leads to decreased interest rates and a rise in investment spending. D) decreases the money supply, which leads to increased interest rates and a fall in investment spending.
Purchasing power parity does NOT provide accurate predictions of exchange rates because
A) almost all goods and services are traded across nations. B) governments currently fix exchange rates. C) firms are unable to set prices differently across nations. D) non-traded goods account for approximately 50 percent of the value of production in an economy.
If the Federal Reserve uses open market operations to offset a recession, the Fed ________ government securities in order to ________ the federal funds rate
A) buys; not change B) sells; raise C) sells; lower D) buys; lower E) buys; raise
Exhibit 19-2 Balance Sheet of Springfield National Bank Assets Liabilities Total reserves$500 Demand deposits$1,000 Loans$500 In Exhibit 19-2, if Springfield National's customers write checks for $200 and the required reserve ratio is 20 percent, then its required reserves fall to:
A. $0. B. $40. C. $160. D. $460.