Which of the following constitutes a currency drain from the banking system?
a. Purchase of government securities
b. New demand deposits
c. Banks lending out all excess reserves
d. A banking panic that leads to large withdrawals from banks
e. Lower required reserve holdings
d
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If the production of a good created both external costs and external benefits, but the external costs were greater, without government intervention, a market economy will:
a. not produce the product at all b. overproduce the product. c. underproduce the product. d. produce the optimal amount of the product.
If both labor demand and labor supply fall, what will happen to the real wage, employment, and output?
a. The real wage will increase, real output will increase, but the effect on employment depends upon the magnitudes of the shifts. b. The real wage will increase, but the effects of employment and real output depend upon the magnitudes of the shifts. c. The real wage, employment, and real output will all decrease. d. Employment and real output will decrease, but the effect on the real wage depends upon the magnitudes of the shifts. e. The real wage, employment, and real output will all increase.
A popular video program, used to teach primary school children about economics, defines scarcity as "when you don't have enough of something." Evaluate this definition based on your understanding of the scarcity concept
The cost of producing the typical unit of output is the firm's
a. average total cost. b. opportunity cost. c. variable cost. d. marginal cost.