A bank is in the position to make loans when required reserves:
A. are greater than actual reserves.
B. are less than actual reserves.
C. equal actual reserves.
D. equal excess reserves.
Answer: B
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The joining of firms that are producing or selling a similar product is
A) a conglomerate merger. B) a horizontal merger. C) a vertical merger. D) always an illegal merger.
The optimal amount of pollution is not zero because
A) it has been found that pollution in moderate amounts actually has positive benefits. B) there are no benefits to anyone from having zero pollution. C) zero pollution would be too costly. D) we don't have the political structure that could accomplish the goal.
The costs associated with the negotiation and enforcement of an agreement are
A) property costs.
B) resource factor costs.
C) transaction costs.
D) attorney fees.
Suppose a new law makes illegal the sale of a good that had been legal. This will
A. eliminate deadweight loss. B. decrease consumer surplus. C. increase producer surplus. D. increase consumer surplus.