An individual bank may legally loan out an amount equal to its
A. total net worth.
B. total vault cash.
C. total reserves.
D. excess reserves.
D. excess reserves.
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Which of the following is NOT an expected consequence of balancing the federal government's budget?
A) increased private investment B) increased borrowing from foreigners C) reduced interest payment to foreigners D) B and C.
Taxes are the difference between
A. GDP and net exports. B. GDP and consumer spending. C. consumer spending and saving. D. GDP and disposable income.
After nearly tripling the money supply after the housing market crash and subsequent financial crisis, inflation:
A. has slowly increased, due to restored consumer confidence in the market, increasing the marginal propensity to consume. B. continued to fall, due to the lack of consumer confidence in the market, decreasing the marginal propensity to consume. C. began to spiral out of control, due to the newfound solvency of banks, increasing lending and thus the money multiplier effect. D. stayed relatively low, due to the lack of lending by banks, reducing the effectiveness of the money multiplier.
Kaneshi Hartfield is a sales representative with Plain Truth Advertising. She is an excellent sales representative, but corporate management feels that she is too independent. But they are afraid to act, since Kaneshi maintains her own list of key contacts. This is an example of
A. an asymmetric information problem. B. the failure of bargaining. C. different time horizons of the sales representative and management. D. the free-rider problem.