In commercial banking operations, there is a trade-off between liquidity and profitability
a. True
b. False
Indicate whether the statement is true or false
Answer: True.
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If you want to know the present value of a future payment received in one year, what formula can you use?
A) Present value equals future payment divided by one plus the rate of interest. B) Present value equals future payment times the current market rate of interest. C) Present value equals future payments times one plus the rate of interest. D) Present value equals one plus the rate of interest in decimals divided by future payment.
If the government finances an increase in government purchases with an increase in taxes, which of the following would you not expect to see?
A) an increase in the exchange rate B) a decrease in net exports C) a decrease in the interest rate D) an increase in aggregate demand
How would a decrease in consumer income affect the market for new automobiles?
a. Demand would decrease, leading to an increase in price and a reduction in quantity sold. b. Demand would decrease, leading to a reduction in price and a reduction in quantity sold. c. Demand would increase, leading to an increase in price and an increase in quantity sold. d. Demand would increase, leading to a reduction in price and an increase in quantity sold.
Why is there a prisoners' dilemma?
What will be an ideal response?