Which of the following Fed actions increases the excess reserves of commercial banks?
A. Selling bonds to the public
B. Selling bonds to commercial banks
C. Lower the reserve requirement
D. Increasing the discount rate
Answer: C
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To maximize the social pie, a tax on pollution must equal the external cost created by the polluting activity
Indicate whether the statement is true or false
Who is hurt and who benefits from inflation? Why?
In Figure 9.9, at a full-employment output level of $150 billion, the gap by which actual aggregate income or GDP is different from full-employment income or GDP is
A. An inflationary gap of $25 billion income. B. An inflationary gap of $50 billion income. C. A recessionary gap of $50 billion income. D. Expenditure equilibrium.
The price elasticity of demand measures the responsiveness of changes in price to the quantity demanded.
Answer the following statement true (T) or false (F)