What financial innovations helped banks to get around the bank branching restrictions of the McFadden Act?
What will be an ideal response?
The introduction of the automated teller machine allowed a bank's customers to have access to funds from various locations not just the bank building and was not subject to the branching restrictions. Bank holding companies could own controlling interest in several banks and other companies related to banking.
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Complete crowding out implies that a government deficit financed by selling bonds to the nonblank public will
A) have no effect on aggregate demand. B) reduce aggregate demand. C) increase aggregate demand. D) reduce aggregate demand in the short run but cause demand to increase in the long run.
Which of the following financial assets has both the highest risk and highest return for the period of 1926-2011?
A) small company stocks B) large company stocks C) corporate bonds D) Treasury bills
Opportunity cost:
a. applies only to consumption decisions. b. applies only to production decisions. c. is the same as monetary costs. d. exists because of scarcity. e. is irrelevant for wealthy economies.
In 1984, the South Carolina State Supreme Court ruled that a 20 percent admission tax on X-rated movies was unconstitutional. When the affected cinemas sought a refund of collected taxes, they were denied on the grounds that the tax, although collected by the theater, was indeed paid by the theatergoers. The Supreme Court apparently believed
a. the supply of X-rated movies was perfectly elastic. b. the demand for X-rated movies was perfectly inelastic. c. the legislation intended that the theatergoers pay the tax. d. the burden fell on the theatergoers-there are no excess burdens on the theater.