Which of the following situations would be considered a money leakage?
a) A bank holding only the minimum required reserves.
b) A business that refuses to accept cash and handles all transactions using credit cards.
c) A senior citizen who keeps her retirement savings in a shoe box underneath her bed.
d) A college student who never carries any cash.
Ans: c) A senior citizen who keeps her retirement savings in a shoe box underneath her bed.
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Assume a country agrees to a free-trade act with another country. In the process, some individuals are displaced from their jobs, thus the free-trade act results in a negative externality
A) False. B) True. C) Only if those who were displaced are not compensated with another job or income transfer. D) Only if those who were displaced were compensated with another job or income transfer.
The two largest auto manufacturers, Toyota and GM, have experimented with hydrogen powered cars in the past, and they are currently considering the decision to introduce a hydrogen powered car into the commercial automobile market
The payoffs from the possible actions are measured in millions of dollars per year, and the possible outcomes are summarized in the following game matrix: GM produces GM does not produce Toyota produces -10, -10 50, 0 Toyota does not produce 0, 40 0, 0 If both firms enter the market simultaneously, what is the Nash equilibrium? A) Toyota produces and GM does not produce. B) GM produces and Toyota does not produce. C) There are two Nash equilibria - GM produces and Toyota does not produce, or Toyota produces and GM does not produce. D) There is no Nash equilibrium in this game.
Economic activities that signal forthcoming changes in the economy are referred to as:
a. coincidental economic indicators. b. GDP implicit price deflators c. lagging economic indicators. d. perfect economic indicators. e. leading economic indicators.
How can an MNE overcome its inherent disadvantages?
A. By producing more than two products in which it has comparative advantage B. By expanding its operation in more than two host countries C. By owning one or more assets that are not owned by its local competitors in the host country D. By borrowing funds from the host country rather than transferring funds from the parent firm