Checkable and debitable accounts in commercial banks and other financial institutions are classified as money because
A. they are not liabilities of the banks.
B. banks hold currency in their vaults equal to the value of demand deposits.
C. they are generally acceptable in the payment of debt.
D. they sometimes earn an interest income for the depositor.
Answer: C
You might also like to view...
Which of the following statements about central bank structure and independence is TRUE?
A) In recent years, with the exception of the Bank of England and the Bank of Japan, most countries have reduced the independence of their central banks, subjecting them to greater democratic control. B) Before the Bank of England was granted greater independence, the Federal Reserve was the most independent of the world's central banks. C) Both theory and experience suggest that more independent central banks produce better monetary policy. D) While the European Central Bank is independent, it is not as independent as the Federal Reserve.
If an agent is risk neutral and a principal is risk averse, which of the following contracts would be efficient in risk bearing?
A) A fixed fee is paid to the agent. B) A fixed fee is paid to the principal. C) An hourly rate is paid to the agent. D) The agent enjoys a share of the profit.
Some electrical utilities are monopolies because of
A) government restrictions that prevent new firms from entering the market. B) ownership of resources without close substitutes. C) diseconomies of scale. D) their inability to earn profits.
In economics, secondary effects refer to the
What will be an ideal response?