Using the income approach, indirect business taxes have to be added to get gross domestic product because the:
a. selling price of a product includes these taxes, which are income to the governmentrepresenting the public interest of households
b. selling price of a product includes these taxes, which are resource payments.
c. selling price of a product excludes these taxes and therefore they have to be added.
d. selling price includes these taxes which are actually not income to any sector of the economy.
a
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If commercial banks are maintaining a 4 percent reserve/deposit ratio and the Fed raises the required reserve ratio to 6 percent, then banks will ________ their loans based on current deposits, and the money supply will ________.
A. decrease; decrease B. increase; increase C. decrease; increase D. increase; decrease
When the value of one currency increases relative to the value of another currency, it has experienced:
A. exchange rate depreciation. B. exchange rate appreciation. C. interest rate depreciation. D. net capital inflow.
Much of the nation's coal is extracted by strip mining. This process leaves a huge barren hole in the ground when complete, and the cost of replanting the trees is approximately $10 per ton of coal. Burning the coal for electricity causes air pollution. No one knows how much damage the air pollution causes, but we know that for another $10 per ton the power plant can be outfitted with a pollution control device. What is one measure of the true social cost of coal fired electricity, in dollars per ton?
A. Private marginal cost plus the $10 replanting charge. B. Private marginal cost plus the $10 emission control charge. C. Only the $20 of replanting and emission control charges, because the other costs are private, not social. D. Private marginal cost plus the $20 of replanting and emission control charges.
Which of the following compose the M2 money supply?
A. currency only B. currency, checkable deposits, and traveler's checks C. M1 plus large denomination time deposits and Eurodollar deposits D. M1 plus savings deposits and small-denomination time deposits