Banks are considered a safer place to deposit money now than they were prior to 1933 because
a. gold reserves have increased.
b. reserve requirements are higher.
c. the creation of the FDIC reduced the likelihood of bank runs.
d. the commercial banks are no longer permitted to extend loans to the Federal Government.
C
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The primary assets of credit unions are
A) municipal bonds. B) business loans. C) consumer loans. D) mortgages.
It is appropriate to use the supply-and demand-model if, in a market
A) everyone is a price taker with full information about the price and quality of the good. B) firms sell identical products. C) costs of trading are low. D) All of the above.
The extended least squares assumptions are of interest, because
A) they will often hold in practice. B) if they hold, then OLS is consistent. C) they allow you to study additional theoretical properties of OLS. D) if they hold, we can no longer calculate confidence intervals.
Suppose that in a month the price of a cup of coffee increases from $1 to $1.50. At the same time, the quantity of cups of coffee demanded decreases from 200 to 190. The price elasticity of demand for cups of coffee (calculated using the midpoint formula) is approximately:
A. 0.13. B. 0.5. C. 7.8. D. 20.