Which of the following might limit the money creation process to an amount less than the potential amount?
a. bank pursuit of profits
b. public holding some cash
c. business demand for loan
d. increased use of credit cards
b
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Allocative efficiency is achieved when
A) firms produce the goods and services that consumers value most.
B) firms produce goods and services at the lowest cost.
C) there are no shortages or surpluses in the market.
D) goods and services are fairly distributed among consumers in an economy.
Refer to Figure 7-3. With a quota in place, what is the quantity supplied by domestic producers?
A) 16 million pounds B) 18 million pounds C) 28 million pounds D) 34 million pounds
The purpose of collateral and restrictive covenants is to reduce ________ in debt contracts
A) adverse selection B) transactions costs C) moral hazard D) loan amounts
Many central banks, by law, focus only on inflation, but one of the laws governing the Federal Reserve mandates that the Federal Reserve focus on maintaining
a. high inflation and full employment. b. low inflation and high employment. c. high inflation and high employment. d. low inflation and full employment.