Which of the following reduces U.S. potential for economic growth by reducing household incentive to use private property most efficiently and effectively?
(a) Personal income taxes
(b) Farm subsidies and import tariffs
(c) Auto bailouts
(d) Regulation in the health care industry
Question 2
If a fear of increased bankruptcies of firms causes banks to increase their reserve to deposit ratio, then
a. the money supply and money multiplier will rise.
b. the monetary base and the money multiplier will fall.
c. there will be no change in the money multiplier, but the money supply will fall.
d. the money multiplier and the money supply will fall.
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