How do the banks create money?
A. When there is a decrease in checking account deposits, banks lose reserves and reduce their loans, and the money supply expands
B. When there is an increase in checking account deposits, banks gain reserves and make new loans, and the money supply expands
C. Banks buy bonds in the open market and gain reserves; this excess reserve holding increases the money supply
Ans: B. When there is an increase in checking account deposits, banks gain reserves and make new loans, and the money supply expands
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A short-term debt instrument issued by well-known corporations is called
A) commercial paper. B) corporate bonds. C) municipal bonds. D) commercial mortgages.
In the model of the open economy with perfect capital mobility, ________ is an exogenous variable
A) Y B) C C) I D) S E) r
With a put option, the option holder:
A. can buy the asset but only on the date specified. B. can buy or sell the asset, it is their option. C. has the right to sell the asset. D. has the right to buy the asset.
To estimate the cost of the September 11, 2001 terrorist attacks, which of the following concepts would be used to calculate the value of lost lives?
A. The fallacy of composition B. The concept of acceptable risk C. The total value of lost earnings D. The present value of lost earnings