Fractional reserve banking is a system in which
A) depository institutions pay a fraction of advertised interest rates.
B) a fraction of banking services must be provided by depository institutions.
C) depository institutions hold a fraction of total deposits in reserve.
D) the money supply is a set fraction of the U.S. gold reserves.
Answer: C) depository institutions hold a fraction of total deposits in reserve.
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Holding nominal money balances constant, a decrease in the price level
A) causes the real value of the money balances to increase, thereby increasing the interest rate. B) generates a reduction in the value of the money balances, leading to higher interest rates and a decrease in total planned real expenditures. C) causes the real value of the money balances to increase, in turn increasing total planned real expenditures. D) causes the real value of the money balances to decrease, in turn decreasing total planned real expenditures.
Which of the following statements about the rate of return is NOT correct?
A) The total rate of return may be greater or less than the current yield. B) The total rate of return may be greater or less than the rate of capital gain. C) The total rate of return may never be negative. D) The total rate of return is greater than the coupon, holding everything else constant.
Answer the following statements true (T) or false (F)
1. If a market is defined more broadly, then the chances that firms in that market will be found to be violating antitrust laws based on the "structuralist" perspective will increase. 2. A conglomerate merger is a merger between firms at different stages of the production process of a product, such as a merger between a flour milling company and a baking company. 3. Strict enforcement of antitrust laws will generally complement the economic objective of encouraging new technologies that require large amounts of capital investment. 4. Public regulation rather than public ownership has been the primary means used in the United States to ensure that the behavior of natural monopolists is socially acceptable. 5. If the government regulates a natural monopoly and sets a "fair return" pricing policy, then the regulated firm will have greater incentive to improve its operating efficiency.
Hester owns an ice cream sho
A) $2. B) $20. C) $10. D) $40. E) $4.