Failure to account for the increased transportation costs that would result from building fewer and more centrally located production facilities could result in firm managers selecting a scale of operation that is larger than the optimum
Indicate whether the statement is true or false
TRUE
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When a government fines and/or imprisons convicted drug dealers, it is attempting to reduce the illegal drug trade by shifting the ________ curve for illegal drugs ________
A) demand; rightward B) demand; leftward C) supply; rightward D) supply; leftward
Which of the following is a bank asset?
A) checkable deposits B) savings deposits C) borrowings in the federal funds market D) cash items in the process of collection
Which of the following is NOT true of the interest rate channel?
A) Bank loans play no special role. B) The Fed changes the real interest rate which affects the components of aggregate expenditures. C) Borrowers are indifferent as to how and from whom they raise funds. D) Alternative sources of funds are not substitutes for each other.
Taxes create deadweight losses because they
a. reduce costs for firms. b. distort incentives. c. cause prices to decrease. d. create revenue for the government.