There are three prerequisites to creating money. They are
a. currency, homogeneity, volatility
b. fractional reserve system operating with financial intermediaries, people willing to make demand deposits, borrowers prepared to take out loans
c. Federal Reserve Notes, willing creators of demand deposits, investment managers
d. banks loaning new deposits to other banks, borrowers who create M1, a need for a store of value
e. excess reserves, reserve requirements, financial intermediaries
B
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Which of the following is true of the segmented markets theory?
A) It assumes that borrowers have particular periods for which they want to borrow. B) It assumes that lenders always lend for short periods. C) It provides a good explanation for why yield curves usually slope upward. D) It assumes that instruments with different maturities are perfect substitutes.
To have more consumer goods in the future, we must
A) produce more capital goods today. B) lower current income. C) get government involved in the production process. D) stop producing all goods today.
Transferable pollution rights would allow firms to move into an area that is already as polluted as allowed by EPA standards
a. True b. False Indicate whether the statement is true or false
Vince says that the present value of $500 to be received one year from today if the interest rate is 8 percent is more than the present value of $500 to be received two years from today if the interest rate is 4 percent. Terri says that $500 saved for two years at an interest rate of 3 percent has a larger future value than $500 saved for one years at an interest rate of 6 percent
a. Both Vince and Terri are correct. b. Only Vince is correct. c. Only Terri is correct. d. Neither Vince nor Terri is correct.