Banks are required to hold reserves against the total value of all their assets
a. True
b. False
Indicate whether the statement is true or false
False
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Policymakers' use of stabilization policy to eliminate output gaps is more appropriate when an economy self corrects very ________ and when the output gap is very ________.
A. rapidly; small B. slowly; small C. rapidly; large D. slowly; large
A bond is:
A. a financial asset that represents partial ownership of a company. B. a payment made periodically to all shareholders of a company. C. an agreement in which a lender gives money to a borrower in exchange for a promise to repay the amount loaned plus an agreed-upon amount of interest. D. a promise by the bond issuer to pay a lump sum at a specified maturity date, and, in some cases, to pay periodic interest at a specific percentage rate.
To determine the optimal level of output in a market with negative externalities, a benevolent social planner would look for the level of output at which private cost equals private value
a. True b. False Indicate whether the statement is true or false
A theory of taxation that states that citizens should bear tax burdens in line with their ability to pay taxes is the
A. benefits-received principle. B. equal payment principle. C. ability-to-pay principle. D. equity principle.