The study of the decision-making process of government is the study of:
a. public choice theory.
b. rational expectations theory.
c. Keynesian economics.
d. social economics.
a
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Figure 4-4
Given the demand and supply conditions shown in , if the government imposes a price ceiling of a, which of the following would be true?
a.
Consumers would want to buy r units.
b.
Consumers would want to buy s units.
c.
Producers would wish to sell s units.
d.
Producers would wish to sell r units.
Assume that the commercial banking system has checkable deposits of $10 billion and excess reserves of $1 billion at a time when the reserve requirement is 20%. If the reserve requirement is now raised to 30%, the banking system then has ________.
A. excess reserves of only $.5 billion B. excess reserves of $2 billion C. a deficiency of reserves of $.5 billion D. neither an excess nor a deficiency of reserves