Sarah has just deposited $1,000 in her checking account. She knows that the bank will keep part of these funds on hand and loan out the rest. This is an example of
A. fractional reserve banking.
B. a sweep account.
C. the Federal Reserve System.
D. excess reserves.
Answer: A
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How can a firm have a negative valued added, as supposedly some state-owned businesses did in the former Soviet Union? What has to be true for value added to be negative?
What will be an ideal response?
One purpose of regulation of financial markets is to
A) limit the profits of financial institutions. B) increase competition among financial institutions. C) promote the provision of information to shareholders, depositors and the public. D) guarantee that the maximum rates of interest are paid on deposits.
A Cobb-Douglas production function:
A) exhibits constant returns to scale. B) exhibits increasing returns to scale. C) exhibits decreasing returns to scale. D) can exhibit constant, increasing, or decreasing returns to scale.
You are part of a local community theater group. It is the goal of the group to increase the amount of revenue earned through ticket sales. Mary says the obvious solution is to increase ticket prices. Is Mary correct?
a. Mary is correct if the demand for tickets is price inelastic. b. Mary is incorrect if the demand for tickets is price inelastic. c. Mary is correct. The increase in ticket prices will always increase revenue. d. Mary is incorrect. The increase in ticket prices will never increase revenue. e. Mary is incorrect. The way to increase revenue is to decrease ticket prices.