The CPI market basket
A) weights the goods and services according to the budget of an average urban household.
B) determines the best possible way of taxing the average urban household.
C) determines how the spending patterns of the average urban household change from month to month.
D) determines how spending patterns change from urban household to urban household.
E) changes from one month to the next in order to calculate the CPI.
A
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Suppose a bank has checkable deposits of $100,000 and the required reserve ratio is 20 percent. If the bank currently has $100,000 in reserves, it could expand the money supply by as much as:
a. $100,000. b. $400,000. c. $0. d. $20,000. e. $80,000.
A Pigouvian subsidy
A. cannot exist with externalities. B. is the same thing as a Pigouvian tax. C. is measured in terms of Pigouvian dollars. D. moves production to the socially optimal level of output.