By raising the legal reserve requirement, the Fed
a. increases the money supply
b. decreases the discount rate
c. buys bonds through open market operations
d. seeks to influence fiscal policy
e. restricts banks' abilities to make loans
E
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Refer to Table 2-10. What is Fred's opportunity cost of making a unicycle?
A) 1/3 of a pogo stick B) 1/2 of a unicycle C) 3 pogo sticks D) 1.3 pogo sticks
Everything that consumers purchase during a period is included as part of consumption when calculating GDP
a. True b. False
According to the efficient market hypothesis, rational people will not recognize that asset prices are rising too quickly.
Answer the following statement true (T) or false (F)
If a pollution tax imposed on a firm is greater than its external cost:
A. the externality will be fully internalized. B. the social production cost will increase by the amount of the pollution tax. C. the pollution tax will be efficient. D. from a society's point of view, the firm will be producing too little.