Suppose a bank lends you 1,000 to purchase a car. Which of the following correctly represents the ...

Suppose a bank lends you 1,000 to purchase a car. Which of the following correctly represents the changes in the bank's balance sheet before you spend the money?
 a. Assets: loans, +1,000 . Liabilities and net worth: checking deposits, +1,000
 b. Assets: loans, -1,000 . checking deposits, +1,000 . Liabilities and net worth: no change
  c. Assets: loans, +1,000 . checking deposits, -1,000 . Liabilities and net worth: no change
  d. Assets: checking deposits, +1,000 . Liabilities and net worth: loans, +1,000
 e. Assets: checking deposits, +1,000 . Liabilities and net worth: loans, -1,000

QUESTION 2

Which of the following is not an example of a government purchase?
 a. Salaries of teachers in public schools
  b. Chinese toys to be sold in stores
 c. Purchase of military aircrafts
 d. Construction of an interstate highway
  e. Building a public school

QUESTION 3

Markets for pollution rights:
 a. have never been tried in the United States.
  b. assign property rights to those who value them least.
  c. allow the government to assign property rights.
  d. enable those who value them most to pollute.

QUESTION 4

Suppose you borrow 1,000 to purchase a car. Which of the following correctly represents the changes in your personal balance sheet after the bank lends the money, but before you spend it?
 a. Assets: loan, +1,000 . Liabilities and net worth: checking deposit, +1,000
 b. Assets: loan, -1,000 . checking deposit, +1,000 . Liabilities and net worth: no change
  c. Assets: loan, +1,000 . checking deposit, -1,000 . Liabilities and net worth: no change
  d. Assets: checking deposit, +1,000 . Liabilities and net worth: loan, +1,000
 e. Assets: checking deposit, +1,000 . Liabilities and net worth: loan, -1,000

QUESTION 5

Net taxes are:
 a. taxes plus transfer payments.
 b. taxes minus transfer payments.
 c. an injection into the economic system.
  d. consumption after taxes.
 e. government spending minus taxes.

QUESTION 6

A government passes a new law allowing only 1,000 tons of pollution per day to be generated and simultaneously sells 1,000 transferable rights to emit one ton each of pollution per day. Which of the following is true?
 a. The pollution will be created by those least willing and able to pay the damages.
  b. The pollution will be created by those most willing and able to pay for the right to pollute.
  c. The funds collected by the government will be enough to compensate any individuals harmed by the pollution.
  d. Pollution will increase from zero to 1,000 units per day.

QUESTION 7

When a check is cleared against Bank A after being deposited at Bank B, _____.
 a. both Bank A's and Bank B's liabilities increase
 b. both Bank A's and Bank B's liabilities decrease
 c. Bank A's liabilities increase and Bank B's liabilities decrease
  d. Bank A's liabilities decrease and Bank B's liabilities increase
  e. there is an increase in the liabilities of the Federal Reserve

QUESTION 8

Which of the following is true of net taxes?
 a. The level of net taxes varies directly with the level of transfer payments.
  b. The level of net taxes varies inversely with the level of transfer payments.
  c. Net taxes must always be less than zero.
 d. Net taxes increase when income tax rates are reduced.
 e. Net taxes increase when income decreases.