Solar vehicles that operate on photovoltaic cells:
a. are economically efficient today as compared to gasoline vehicles.
b. are not economically efficient because they create greater negative externalities than gasoline vehicles.
c. are not economically efficient even though they create fewer negative externalities than gasoline vehicles.
d. should be subsidized by government so that they cost less than gasoline automobiles.
QUESTION 2By holding highly liquid assets to guard against sudden large withdrawals, banks:
a. sacrifice safety.
b. sacrifice profitability.
c. increase profitability.
d. diversify their portfolio.
e. earn more interest than they could on business loans.
QUESTION 3Which of the following is most likely to cause a rightward shift of the investment demand curve?
a. An increase in income
b. A decrease in the market interest rate
c. An improvement in business expectations
d. An increase in the market rate of interest
e. A decrease in income
QUESTION 4Command-and-control legislation, as compared to incentive-based regulation:
a. encourages the use of comparative advantage in the short run, and the development of new technology in the long run.
b. encourages the use of comparative advantage in the short run, but discourages the development of new technology in the long run.
c. discourages the use of comparative advantage in the short run, but encourages the development of new technology in the long run.
d. discourages the use of comparative advantage in the short run, and discourages the development of new technology in the long run.
QUESTION 5In order to meet a deficiency of required reserves, a bank could:
a. buy securities.
b. deposit vault cash with the Fed.
c. turn some of its deposits at the Fed into cash.
d. close some checking accounts.
e. borrow from another bank in the federal funds market.
QUESTION 6If the market interest rate decreases, then there will be _____.
a. an upward movement along the investment demand curve
b. a downward movement along the investment demand curve
c. a rightward shift of the investment demand curve
d. a leftward shift of the investment demand curve
e. no movement along or shift of the investment demand curve
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