Fractional reserve banking refers to a banking system in which
A) bank deposits are less than bank reserves.
B) bank reserves are only a fraction of total deposits.
C) bank reserves are only a fraction of required reserves.
D) bank loans are less than bank reserves.
B
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A price ceiling set by government will increase the equilibrium price and quantity in a market.
Answer the following statement true (T) or false (F)
Pareto optimality is the condition in which
A. it is possible to make one person better off without making someone else worse off. B. firms are forced to internalize the effects of all externalities. C. the distribution of income is equal. D. no change is possible that will make some members of society better off without making at least one other member of society worse off.
If two goods, "x" and "y", are perfect substitutes, then which of the following best represents the utility function for the two goods?
A) U = x + y B) U = x ? y C) U = x2 + y2 D) Any of the above.
A production possibilities curve shows the relationship between the production of which two items?
(A) Farm goods and factory goods only. (B) Any two categories of goods. (C) Two types of factory goods only. (D) Two types of farm goods only.