Because a bank earns money when it makes a loan to a borrower it:
A. has an incentive to loan out as much of each deposit as it can.
B. has more of an incentive to loan out money than take money in through deposits.
C. has an incentive to borrow from the government as much as it can to loan out.
D. needs to loan out more than it takes in through deposits to make money.
Answer: A
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Which of the following is an example of a discretionary fiscal policy during a recession?
A) A temporary tax cut to boost consumption B) A decrease in money supply to lower the federal funds rate C) A decrease in transfer payments to unemployed workers D) An increase in tax rates to increase revenue
Maintaining a fixed exchange rate over the long run is today
A) virtually impossible. B) more vulnerable to speculative attacks than in the past. C) preferable. D) possible only in special cases such as maintaining strict capital controls. E) aided by technology which allows instant movement of money between financial markets in different countries.
Diseconomies of scale are also known as
a. Increasing returns to scale b. Decreasing returns to scale c. Constant returns to scale d. None of the above
Because a monopolist is the sole producer in its market, it can necessarily alter the price of its good (i) without affecting the quantity sold. (ii) without affecting its average total cost. (iii) by adjusting the quantity it supplies to the market
a. (ii) only b. (iii) only c. (i) and (ii) only d. (ii) and (iii) only