If the fractional reserve system did not exist,
a. the banking system could not create money.
b. there would be no effect on the ability of the banking system to create money.
c. banks would loan out its required reserves.
d. banks would be highly susceptible to bank runs.
e. the banking system would realize the money multiplier.
a
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Explain when a country would face a balance of payments deficit and when it would face a balance of payments surplus if it was operating under a fixed exchange rate system
What will be an ideal response?
New growth theory proposes that real GDP per person grows because of ________ and that growth ________
A) the pursuit of profit; can persist indefinitely B) productivity shocks; can persist indefinitely C) technological change; can only increase above the subsistence level temporarily D) productivity shocks; occurs randomly
How effective is discount policy as compared to open market operations in managing the money supply? Explain how The Federal Reserve uses discount policy today
What will be an ideal response?
Monopolists are criticized because they are inefficient. What is meant by this statement?
a. Monopolists charge too high a price. b. Monopolists don't innovate enough to control pollution. c. Monopolists produce a large quantity of waste. d. Monopolists usually don't produce at the minimum of the ATC. e. Monopolists could use their resources better elsewhere.