Fractional reserve banking refers to a system in which the depository institution
A. holds reserves greater than its deposits.
B. holds reserves equal to its deposits.
C. holds reserves less than its deposits.
D. holds zero reserves.
Answer: C
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Refer to Table 1-3. What is Ivan's marginal benefit if he decides to stay open for six hours instead of five hours?
A) $10 B) $20 C) $30 D) $91.67
A difference between the new classical and monetarist models is that expectations in the new classical model are _____ while they are _____ in the monetarist model
a. forward looking; backward looking. b. rational; adaptive. c. correct; mistaken. d. perfectly competitive; imperfectly competitive. e. both a and b.
Refer to the above figure. Suppose the economy is at point B and the central bank adopts expansionary monetary policy. In the short run, this will result in
A) the economy moving towards point A. B) the economy staying at point B. C) the economy moving towards point C. D) an outcome that cannot be predicted, as not enough information is given.
In Fisher's model of the determination of the rate of return, the price of a "future good" is:
a. less than the price of a current good if the interest rate is negative. b. equal to the price of a current good if the interest rate is positive. c. greater than the price of a current good if the interest rate is positive. d. less than the price of a current good if the interest rate is positive.