If inflation is a threat, the Fed is likely to engage in a contractionary monetary policy.
a. true
b. false
Ans: a. true
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If the reserve ratio was 100 percent, then:
A. maximum lending would occur. B. banks would create money in the economy. C. banks would lend all of their deposits. D. no lending would occur using deposits.
The production possibilities curve tells us:
A. the specific combination of two products that is most desired by society. B. that costs do not change as society varies its output. C. that costs are irrelevant in a society that has fixed resources. D. the combinations of two goods that can be produced with society's available resources.
A good that has external benefits associated with its production will be
A) produced at the optimal level. B) underproduced. C) overproduced. D) not produced.
Which of the following help to correct for the market failure of imperfect information?
A. used car warranties B. medical licensing C. truth-in-advertising regulations D. All of the above are correct.