-Refer to the Diagram Above

question 176

Multiple Choice

-Refer to the diagram above.Suppose that Environment Canada requires that all automobiles have a certain air pollution technology that costs $700 per automobile.The reduction in air pollution will be

• A) 0%.
• B) 45%.
• C) 50%.
• D) 70%.
• E) 100%.

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Definitions:

Reserve Requirement

A regulation set by central banks that determines the minimum amount of reserves a bank must hold against deposits, influencing the bank's capacity to lend.

Fed

Short for the Federal Reserve System, which is the central banking system of the United States responsible for setting monetary policy.

Federal Reserve

The central banking system of the United States, which regulates the U.S. monetary and financial system.

Clearing of Checks

The process by which banks exchange checks or drafts drawn on each other and settle the differences to facilitate the actual transaction the check represents.