One key difference between the Fed and the European Central Bank (ECB) in their reserve requirements is that the:
A. reserve requirement of the ECB are determined annually.
B. ECB reserve requirement is based on all of a bank's liabilities.
C. reserve requirements of the ECB are at a much higher rate than the Fed's.
D. ECB's reserve requirements are more difficult for banks to predict.
Answer: B
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The introduction of refrigerators into American homes:
A) decreased the magnitude of the short run own price elasticity of demand for raw meat. B) did not affect the short run own price elasticity of demand for raw meat. C) increased the magnitude of the short run own price elasticity of demand for raw meat. D) decreased the magnitude of the short run own price elasticity of demand for smoked meats.
Which of the following provides the strongest evidence that a firm operating in the highly competitive retail sector is failing to provide goods and services that consumers value highly relative to their cost?
a. The firm is making losses, and its sales are declining. b. The top-level managers of the firm are paid high salaries. c. The wages earned by the employees of the firm are low. d. The firm is a large corporation. e. The firm is highly profitable, and its sales have grown rapidly.
In the aggregate expenditures model, if aggregate expenditures (AE) are greater than GDP, then:
A. inventory is depleted. B. inventory is accumulated. C. inventory is unchanged. D. employment decreases.
In an economic model, assumptions
A. are not important in determining the usefulness of the model. B. must be applicable to all real-world situations. C. must be eliminated before being used to make sure the model is realistic. D. define the set of circumstances in which the model is most likely to be applicable in the real world.