The manner in which FDIC deposit insurance is set up in the United States encourages banks to
A) make riskier loans than they otherwise would.
B) reject some loans that probably would be profitable.
C) be too conservative in their lending practices.
D) maintain excess reserves that are too great.
A
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Suppose that the Federal Reserve issued bonds in the amount of $45 million and the reserve requirement was 10%, what would be the resulting change to the monetary base?
A) $45 million B) $450 million C) $4.5 million D) The bond issuance would not impact the monetary base only the money stock.
When producers produce more consumer goods than consumers are prepared to buy, the remaining consumer goods allow intended investment to increase, increasing national income
Indicate whether the statement is true or false
Accounting profit is equal to:
A. total revenue minus explicit costs. B. total revenue minus explicit and implicit costs. C. economic profit minus implicit costs. D. total revenue minus implicit costs.
Savings is considered the portion of income:
A. in any interest-bearing account. B. that is placed in an individual's savings account. C. that is not immediately spent on consumption of goods and services. D. that is spent on productive inputs, such as factories, machinery, and inventories.