In fractional reserve banking:
a. bank assets are less than bank reserves.
b. only a fraction of total deposits are bank reserves.
c. only a fraction of required reserves are investor assets.
d. bank loans are less than bank reserves.
e. a fraction of bank reserves needs to be backed by gold.
b
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The optimal bidding strategy in a first-price sealed-bid auction is identical to the optimal bidding strategy in a(n) ________ auction
A) open-outcry English B) open-outcry Dutch C) second-price sealed-bid D) dollar
A lower discount rate discourages banks from borrowing reserves and making loans. Therefore, if the Fed wants to expand the money supply, it raises the discount rate
a. True b. False Indicate whether the statement is true or false
The federal government _______ securities (treasury bonds, notes, and bills) to cover its budget deficits.
a. buys b. sells c. trades d. creates
Two candidates, Smith and Jones, are running for the same political office. Last night they were in a debate. It is generally accepted that Smith is perceived more to the left after the debate than before the debate. This is bad news for Jones if before the debate Smith was perceived
A) too far right. B) too far left. C) as being in the middle of the political spectrum. D) b or c E) none of the above