Which statement is most correct about the types of deposits a commercial bank can accept?
A) A commercial bank does not accept deposits but sells shares.
B) A commercial bank accepts checking, savings and time deposits.
C) A commercial bank accepts savings and time deposits, but not checking deposits.
D) A commercial bank can only accept checking deposits from commercial enterprises.
E) A commercial bank can accept loan deposits, reserve deposits, and checkable deposits.
B
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Do the real effects of aggregate demand shocks differ in the short run and long run in the Keynesian sticky-price model from the effects of these shocks in the classical model of perfectly flexible prices? Briefly explain
What will be an ideal response?
Suppose that a government agency is trying to decide between two pollution reduction policy options. Under the permit option, 100 pollution permits would be sold, each allowing emission of one unit of pollution. Firms would be forced to shut down if they produced any units of pollution for which they did not hold a permit. Under the pollution tax option, firms would be taxed $250 for each unit of pollution emitted. The regulated firms all currently pollute and face varying costs of pollution reduction, though all face increasing marginal costs of pollution reduction. Because firms face increasing marginal costs to reduce pollution, the demand curve for pollution permits will be:
A. downward sloping. B. perfectly inelastic. C. upward sloping. D. perfectly elastic.