The main source of profit for financial institutions is
What will be an ideal response?
the difference between interest paid on deposits and interest received on loans.
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If bank depositors in the U.S. suddenly decided to withdraw in currency everything in their checking accounts, commercial banks would
A) be better off because their legally required reserves would decline. B) be unable to meet their demands and would become insolvent. C) borrow the required Federal Reserve notes to meet the requests for currency. D) give them the currency held in their vaults as backing for the checking accounts. E) refuse to honor their requests for 30 days.
The graph of the short-run relationship between the unemployment rate and inflation is called a(n)
A) MP curve. B) LM curve. C) IS curve. D) Phillips curve.
A specialized rice grower sells rice in two markets, the United States and Japan, and the marginal cost is the same in both markets. The price elasticity of demand in the United States is -2.0, and the price elasticity of demand in Japan is -1.5
If the grower practices group price discrimination, which country's consumers will pay a higher price and by how much?
A computer sells for $800 in the United States and for 600 British pounds in England. Given an exchange rate of 0.65 British pounds = $1, how do the computer prices of these countries compare?
a. The computer sells for the same price in both countries. b. The computer costs $923 more in the United States. c. The computer costs $95 more in England. d. The computer costs $124 less in the United States. e. The computer costs $124 less in England.