A run on a bank may occur if
a. depositors withdraw some funds to invest in the stock market.
b. required reserves are increased.
c. interest rates are raised.
d. depositors lose confidence in the bank and attempt to withdraw all their funds.
e. All of the above are correct.
d
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Business people often speak about price elasticity without actually using the term. Which statement describes a good with an elastic demand?
A) "A price cut won't help me. It won't increase my sales, and I'll just get less money for each unit." B) "I don't think a price cut will help my bottom line any. Sure, I'll sell a bit more, but I'll more than lose because the price will be lower." C) "My customers are real shoppers. After I cut my prices just a few cents below those my competitors charge, customers have been flocking to my store and sales are booming." D) "The economic expansion has done wonders for my sales. With more people back at work, my sales are taking off!"
If the government wishes to correct the existence of positive externality, it could
A) grant subsidies to consumers to stimulate demand. B) impose a tax on the producers to stimulate supply. C) impose taxes on consumers to stimulate demand. D) grant subsidies to producers to reduce supply.