Banking panics are especially dangerous because:
A. they can lead to other panics, such as retail panics.
B. the government will respond by seizing all banking assets.
C. they can start easily and spread quickly.
D. the banking sector employs about 25% of workers in the United States.
Ans: C. they can start easily and spread quickly.
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Suppose the Chinese government regulates the price of food and forbids firms from setting a higher price. In this case the government is setting a
A) price floor. B) price ceiling. C) quota. D) tax.
Nongovernmental organizations
a. provide aid from private sources b. help administer some government aid c. are often able to address sensitive issues that government agencies cannot d. are important sources of disaster relief funds e. all of the above
A tax multiplier equal to -4.30 would imply that a $100 tax increase would lead to a:
a. 43 percent decrease in real GDP. b. $430 decline in real GDP. c. $430 increase in real GDP. d. 4.3 percent increase in real GDP. e. 4.3 percent decrease in real GDP.