A lowering of the required reserve ratio might not expand the money supply if:
A. tax rates are also lowered at the same time.
B. tax rates are increased at the same time.
C. borrowers are unwilling to borrow the new funds the banks have available for loans.
D. borrowers are willing to borrow the new funds the banks have available for loans..
Answer: C
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During which years did the country have a budget surplus?
A) 2008 and 2009 B) 2012 only C) 2011 only D) 2010 and 2012 E) all except 2011
The ABC Corporation is contemplating purchasing a new computer system that would yield a before-tax return of 30 percent. The system would depreciate at a rate of 3 percent per year. The after-tax interest rate is 11 percent, the corporation tax rate is 35 percent, and a typical shareholder of ABC has a marginal tax rate of 30 percent. Assume for simplicity that there are no depreciation allowances or investment tax credits. Do you expect ABC to buy the new computer system?
What will be an ideal response?
By specializing in the production of particular goods, a nation is:
A) less likely to make efficient use of available resources. B) more likely to engage in international trade. C) able to become self-sufficient. D) unable to develop a comparative advantage.
If the public believes that the commitment to a nominal anchor is not credible, the effect of a negative aggregate demand shock is for ________
A) short-run aggregate supply to shift down B) short-run aggregate supply to remain unchanged C) short-run aggregate supply to shift up D) inflation, but not economic activity, to decrease