What is one significant consequence of fractional reserve banking?
A. Banks are vulnerable to "panics" or "bank runs"
B. Banks can only lend an amount equal to its deposits
C. Banks hold a portion of their deposits in gold
D. Banks can serve the withdrawals of all their depositors
A. Banks are vulnerable to "panics" or "bank runs"
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If there is an increase in government spending that is financed by issuing bonds, then
a. interest rates should rise which increases private investment. b. interest rates will remain the same unless taxes are reduced as well. c. interest rates should fall which increases private investment. d. interest rates should rise which decreases private investment. e. None of the above.
The velocity of money is:
a. money supply divided by prices. b. spending divided by output. c. required monetary reserves divided by income. d. GDP divided by the money supply.
Compromise between the desire to facilitate international trade and the need to give domestic governments latitude to govern their economies is called
a. economic structuralism. b. embedded liberalism. c. reciprocity. d. voluntary export restraint.
The opportunity cost of doing or getting something is best and fully defined as:
A. The difference between the marginal cost and benefit of doing something B. The materials used in doing or getting something C. The value of the best alternative that is given up in order to do or get something D. The money spent in doing or getting something