In 1981, the Reagan administration employed a policy that included tax ____ while at the same time the Federal Reserve’s strategy was to combat ____.

The slope of the budget line is equal to the ratio of:

a. marginal utilities. b. money income to the price of the good on the horizontal axis. c. money income to the price of the good on the vertical axis. d. price of the good on the horizontal axis to the price of the good on the vertical axis.

If a bank has $50,000 in excess reserves at the end of a business day and the required reserve ratio is 20 percent, the bank can increase its profits by: a. keeping the excess reserves

b. loaning out $40,000. c. loaning out $50,000 to another bank. d. borrowing $50,000 to remove the excess reserves. e. keeping $10,000 and depositing $40,000 with the Fed.