The frequency of banking panics was greatly reduced when
a. the Federal Reserve was created
b. the federal government started insuring banking deposits
c. the Federal Reserve increased the required reserve ratio
d. the Federal Reserve started using open market operations
e. the Federal Reserve decided to take a less active role in controlling the money supply
B
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An effluent fee is imposed on a steel firm to reduce the amount of waste materials that it dumps in a river. Use the following two statements to answer this question:
I. The more easily factors of production can be substituted for one another (for example, capital can be used to reduce waste water), the more effective the fee will be in reducing effluent. II. The greater the degree of substitution of capital for waste water, the less the firm will have to pay in effluent fees. A) Both I and II are true. B) I is true, and II is false. C) I is false, and II is true. D) Both I and II are false.
Under conditions of imperfect competition in the labor market, union efforts to increase wages:
A. Will necessarily cause unemployment B. Will necessarily reduce unemployment C. Will strengthen the monopoly power of management D. May either increase or decrease the level of employment