The Federal Deposit Insurance Corporation
A. only insures deposits in money-center banks.
B.
| discourages banks from engaging in excessive risk taking. |
C. increases the stability of the banking system by reducing the likelihood of bank runs.
D. was established after the Panic of 1907.
Answer: C
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The aggregate supply-aggregate demand model predicts that the short-run effect of an unexpected decrease in taxes is:
a. A decrease in the price level and an increase in real output. b. An increase in both the price level and real output. c. An increase in the price level and a decrease in real output. . d. A decrease in both the price level and real output. e. No effect on the price level and a decrease in real output.
"Monetary policy can be described either in terms of the money supply or in terms of the interest rate.". This statement amounts to the assertion that
a. rightward shifts of the money-supply curve cannot occur if the Federal Reserve decides to target an interest rate. b. the activities of the Federal Reserve's bond traders are irrelevant if the Federal Reserve decides to target an interest rate. c. changes in monetary policy aimed at expanding aggregate demand can be described either as increasing the money supply or as increasing the interest rate. d. our analysis of monetary policy is not fundamentally altered if the Federal Reserve decides to target an interest rate.
Starbucks reports net income for 2018 of $4,518.3 million. Its stockholders’ equity is $5,450.1 million and $1,169.5 million for 2017 and 2018, respectively.
a. Compute its return on equity for 2018. b. Starbucks repurchased over $7,208.7 million of its common stock in 2018. Did this repurchase increase or decrease Starbucks’ ROE? If Starbucks had not repurchased common stock in 2018, what would ROE have been?
You are a hotel manager considering four projects that yield different payoffs, depending upon whether there is an economic boom or a recession. The potential payoffs and corresponding payoffs are summarized in the following table. ProjectBoom (50%)Recession (50%)A$40-$20B-$10$30C$50-$50D$60$60If a manager adopted both project A and project B simultaneously, the expected value of this joint project would be:
A. $40. B. $20. C. $30. D. None of the statements are correct.