Monetary, Fiscal And Incomes Policy, And Inflation

I- banks engage in non-price rationing of loans
II- banks face pressure for loans to those with political connections
III- banks charge a high premium on foreign investments
IV- banks depend on foreign banks to set interest rates

A. I and II only
B. III and IV only
C. I, II and III only
D. I, II , III and IV

I- inflation weakens the creation of credit and capital markets
II- inflation distorts business behavior especially investment behavior
III- inflation increase the price of foreign goods relative to domestic goods
IV- Inflation imposes a tax on the holders of money

A. I and II only
B. III and IV only
C. I, II and IV only
D. I, II and III only

I- an externally dependent banking system
II- a poorly developed securities market
III- a low percentage of demand deposits divided by the total money supply
IV- the relative insensitivity of investment and employment to monetary policies

A. I and II only
B. III and IV only
C. I, II and III only
D. I, II , III and IV

A. adverse selection
B. moral hazard
C. social goods
D. hyperinflation

A. Taxes on international trade are the major source of tax revenue for low-income countries with poor administrative capacity
B. import duties can restrict luxury goods consumption
C. several LDCs have used value-added taxes to raise a substantial fraction of revenues
D. Cascade tax a form of progressive tax, is dominant in DCs

A. indirect taxes
B. direct taxes
C. inelastic
D. value-added tax

A. incomes policy
B. Moral hazard
C. Wagner’s law
D. Fiscal policy

A. demand pull inflation tax elasticity
B. interest rates, financial liberalization
C. interest rates, tax rates
D. tax rates, government spending

A. demand for government spending on public goods goes due to lack of financial backup through tax collection
B. consumer business and government demand for goods and services in excess of an economy’s capacity to produce
C. a shortage of demand for goods and services in excess of supply during depression
D. demand for public goods is greater than demand for consumer goods

A. ratchet inflation
B. inflationary expectations
C. import substitution
D. demand pull inflation