If people refused to use banks to create checkable deposits, the banking system would:
A. not be affected in the money creating process.
B. not have a way to loan out excess reserves.
C. be able to expand the money supply by more than the money multiplier indicates.
D. not be able to create new money.
Answer: D
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How might fiscal policy be used to correct a recessionary gap?
A) Government spending would be adjusted to increase aggregate demand. B) Business operations would be regulated by the government to become more efficient. C) The exchange rate would be adjusted to discourage imports. D) The exchange rate would be adjusted to encourage imports.
Increasing the amount of information available to investors helps to reduce the problems of ________ and ________ in the financial markets
A) adverse selection; moral hazard B) adverse selection; risk sharing C) moral hazard; transactions costs D) adverse selection; economies of scale
The more inelastic the schedule, the greater the percentage of the tax that is borne on the other side of the market
a. True b. False
Which of the following equations correctly describes the quantity equation in terms ofpercentage rate of change? ? means "change in."
A) %?M÷%?V=%?P x %?Y B) %?M+%?V=%?P+%?Y C) %?M÷%?V=%?Y÷%?P D) %?M x %?V=%?P x %?Y