The law of supply states that other things being equal
A. supply creates its own demand.
B. supply will increase to meet demand if demand increases.
C. supply will increase if productivity increases.
D. as price increases, quantity supplied increases.
Answer: D
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A personal tax cut of $50 billion will affect income differently than an increase in government spending by $50 billion because
A. households may save part of the additional income from the tax cut. B. the increase in government spending is less expansionary than the increase in taxes. C. the increase in government spending will produce a political business cycle. D. households may consume more than the additional income from the tax cut.
Which of the following statements is true?
A) In a closed economy, government spending equals zero. B) A nation with a high savings rate will accumulate capital rapidly. C) A nation with a high savings rate will accumulate capital slowly. D) In a closed economy, aggregate consumption equals zero.
In the above figure, if this natural monopolist were regulated and allowed to earn a "fair" rate of return, it would sell the product at the price
A) A. B) C. C) B. D) F.
Excess reserves are important to bankers because:
a. They are typically deposited in special high-yielding investment accounts. b. They represent the funds that can be used to acquire income-producing assets, such as loans and securities. c. They indicate the profits that are divided among the financial institution's owners. d. They indicate profitable banking practices. e. If they are not maintained, banking regulators may shut down the bank.