In the United States, runs on banks are prevented because
A) banks are forbidden to make unprofitable loans.
B) banks have the option of denying depositors access to their funds.
C) the government guarantees bank accounts for up to $250,000.
D) banks keep 100 percent of their deposits on hand.
C
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What are the substitution effects that affect aggregate demand?
What will be an ideal response?
In the long run, any firm may enter or leave a perfectly competitive market.
Answer the following statement true (T) or false (F)
According to classical macroeconomic theory, if real GDP is below the full-employment level, then an increase in aggregate demand will result in which of the following changes in equilibrium?
a. Real GDP will rise, but the price level will remain constant. b. Real GDP and the price level will both rise. c. Real GDP will remain unchanged but the price level will rise. d. None of the above.
If the ____ is/are fixed, a change in nominal income is equivalent to a change in real income
a. price level b. interest rates c. tastes and preferences d. future expectations