Considering the balance sheet for all commercial banks in the U.S., the net worth of banks is:
A. about the same as total liabilities.
B. just about the same as total assets.
C. about 5 times the total assets.
D. about 1/11 of total assets.
Answer: D
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Government policies can affect the supply of a good by: a. affecting the level of output of the good
b. affecting the cost of production of the good. c. affecting the nature of demand in the economy. d. affecting the income of the consumers.
Economic systems should only be judged on efficiency.
Answer the following statement true (T) or false (F)
Which theory explains all three facts about the term structure?
A) expectations B) segmented markets C) preferential treatment D) liquidity premium
A star basketball player signs a contract that newspaper reports indicate is worth $10 million. The player receives $2 million upon signing, and $2 million every year for four years. The contract is worth
A) less than $10 million since the present value of $2 million received one or more years from now is less than $2 million. B) more than $10 million since the present value of $2 million received one or more years from now is more than $2 million. C) $10 million as reported in the press. D) some amount around $10 million. To determine whether it is more or less than $10 million we need to know whether the interest the player can earn is more or less than the market rate of interest.