The fractional banking system _____.
(A) Prevents excessive defaults.
(B) Makes banking more secure.
(C) Only works if there are a limited number of banks.
(D) Ensures growth in the economy.
Ans: (D) Ensures growth in the economy.
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If a private market determines the quantity of smallpox vaccinations, which of the following is true?
a. The equilibrium quantity is too low for efficiency. b. The equilibrium price and quantity are too high for efficiency. c. The equilibrium price is efficient. d. The equilibrium quantity is too high for efficiency. e. The equilibrium price and quantity are efficient.
Suppose that the demand for lava lamps is elastic, and the supply of lava lamps is inelastic. A tax of $2 per lamp levied on lava lamps will increase the price paid by buyers of lava lamps by
A. $1 B. less than $1 C. between $1 and $2. D. $2
Which of the following statements is correct?
A) Demand and supply policies move output and the general price level in the same direction. B) Demand expansion policies lead to increases in output and decrease in the general price level. C) Supply expansion policies lead to increases in output and decrease in the general price level. D) None of the above.
The government should increase the minimum age for collecting Social Security benefits. This statement is best described as
A. a positive statement. B. an example of the fallacy of logic. C. an example of marginalism. D. a normative statement.