If the economy experiences inflation and economic growth, this means that aggregate demand grows by more than aggregate supply

Banks make use of the federal funds market in part to

A) pay their tax liabilities. B) manage liquidity risk. C) deal with moral hazard. D) deal with adverse selection.

If the production of a product results in significant external costs, an appropriate government policy might be to

A) subsidize the production of the good. B) tax producers and thus shift the supply curve to the left. C) tax consumers' incomes and thus shift the demand curve to the left. D) subsidize consumers since the good is being under-consumed.