Although accounts in commercial banks are covered by government insurance, accounts in other financial institutions are not
If the government decides to bail out these other types of financial institutions during times of a financial crisis, it risks increasing the level of ________ in the financial system. A) moral hazard
B) liquidity
C) asset deflation
D) insolvency
A
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Which of the following statements about equilibrium is true?
a. The positive and the normative attributes of equilibrium are similar. b. The equilibrium price fails to redistribute goods in accordance to individual valuations. c. Equilibrium refers to a state of complete happiness or fairness. d. In equilibrium there are neither surpluses nor shortages.
In 1865 Jevons wrote a book, The Coal Question, in which he predicted that England would soon
a. switch from coal to alternative sources of energy b. discover new sources of coal that would create a glut c. go to war with Spain over access to coal deposits d. increase its productivity and become a greater economic power e. run out of coal
Suppose a bank has $200,000 in deposits, a required reserve ratio of 15 percent, and total reserves of $100,000. Then it has excess reserves of
A. $30,000. B. Negative $100,000. C. $200,000. D. $70,000.