Which of the following best describes bank regulations?
a. Bank regulation falls into a number of categories, including reserve requirements, capital requirements, but not restrictions on the types of investments banks may make.
b. Bank regulation falls into a number of categories, including reserve requirements, capital requirements, and restrictions on the types of investments banks may make.
c. Bank regulation falls into a number of categories, including reserve requirements, restrictions on the types of investments banks may make, but not capital requirements.
d. Bank regulation falls into a number of categories, including capital requirements, and restrictions on the types of investments banks may make, but not reserve requirements.
b. Bank regulation falls into a number of categories, including reserve requirements, capital requirements, and restrictions on the types of investments banks may make.
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Free-market economies have led to
A. high growth rates but low efficiency. B. high efficiency and low growth rates. C. high growth rates and high efficiency. D. low growth rates and low efficiency.
Refer to Figure 26-11. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, the Federal Reserve would most likely
A) decrease interest rates. B) not change interest rates. C) decrease the inflation rate. D) increase interest rates.
The most important developments that reduced banks cost advantages include
A) the growth of the junk bond market. B) the competition from money market mutual funds. C) the growth of securitization. D) the growth in the commercial paper market.
Suppose equilibrium national income is currently at $800 billion and intended investment is $100 billion. If an increase in the interest rate reduces intended investment from $100 billion to $75 billion, and the MPC is 0.8, the new level of equilibrium national income will be
a. $500 billion b. $600 billion c. $675 billion d. $775 billion e. $800 billion