Which of the following is a possible impetus for a banking panic?
a. An individual bank fails.
b. A large, very important bank fails.
c. Congress increases the amount of demand deposits that are protected by insurance.
d. Banking rules change to make it harder for banks to make bad loans.
e. Changes in the discount rate.
B
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Checking deposits at banks are
A) money. B) not money because they are an intangible. C) money only because they are insured by the FDIC. D) not money until they are converted into currency.
Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. There is not enough information to determine what happens to these two macroeconomic variables. b. The quantity of real loanable funds per time period rises, and reserve-related (central bank) transactions remains the same. c. The quantity of real loanable funds per time period rises, and reserve-related (central bank) transactions become more positive (or less negative). d. The quantity of real loanable funds per time period falls, and reserve-related (central bank) transactions become more negative (or less positive). e. The quantity of real loanable funds per time period and reserve-related (central bank) transactions remain the same.
The short-run aggregate supply curve shows the various amounts of real output that producers are willing to
A) sell at different profit levels. B) sell at different price levels. C) buy at different income levels. D) buy at different price levels.
The Laffer curve reflects the view that when
A. tax rates are too low, raising them creates a greater incentive for suppliers to increase production. B. tax rates are too high, lowering them not only creates greater incentive for suppliers to increase production, but also ends up generating higher tax revenues. C. tax revenue is too low, the only way to increase it is through higher tax rates. D. tax rates are too high, lowering them also reduces tax revenue.