A goldsmith has 100 gold coins in his safe and 100 receipts circulating. If he lends out 30 of his coins, what is his reserve ratio?
What will be an ideal response?
70/130 = 53.8 percent
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A utilitarian government has to balance the gains from greater income equality against the losses from distorted work incentives. To maximize total utility, therefore, the government
a. would never tax labor income. b. must always achieve a fully egalitarian society. c. enacts policies that only benefit the middle class. d. stops short of a fully egalitarian society.
Financial markets:
A. enable buyers and sellers to exchange financial instruments but not risk. B. do not allow for the transfer of risk but do help reduce it. C. only allow the transfer of risk through derivative securities. D. enable buyers and sellers to exchange risk by buying and selling financial instruments.
The firm’s average cost curve is the result of cost minimization in the use of fixed inputs.
Answer the following statement true (T) or false (F)
If the price of a bond increases, the interest rate (or rate of return on the bond) decreases
a. True b. False