Legal reserve requirements on banks in the United States today are primarily
A) a limitation on banks' ability to make loans.
B) a protection for bank depositors against runs.
C) a protection for bank shareholders against capital loss.
D) an attempt to restrain the market power of banks.
E) designed to control competition among banks.
A
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The developing area receiving the largest share of direct foreign investment is
(a) Africa. (b) Asia. (c) Latin America. (d) Transition economies.
During World War I (1914–18), national debt soared, leading to
(a) money creation and inflation. (b) money creation and deflation. (c) money destruction and inflation. (d) money destruction and deflation.
The expansionary phase of the business cycle is characterized by
a. decreasing real output and increasing unemployment. b. decreasing real output and declining unemployment. c. increasing real output and increasing unemployment. d. increasing real output and declining unemployment.
Mrs. Smith operates a business in a competitive market. The current market price is $8.50 . At her profit-maximizing level of production, the average variable cost is $8.00, and the average total cost is $8.25 . Mrs. Smith should
a. shut down her business in the short run but continue to operate in the long run. b. continue to operate in the short run but shut down in the long run. c. continue to operate in both the short run and long run. d. shut down in both the short run and long run.