Which of the following functions are performed by depository institutions?
I. They make long-term loans using short-term deposits, thereby creating liquidity.
II. They efficiently gather funds from a large base of depositors.
III. They concentrate risk.
A) I only
B) II only
C) III only
D) I and II
D
You might also like to view...
Since most banks have positive gaps and negative duration gaps, an increase in market interest rates will
A) increase bank profits and increase bank capital. B) increase bank profits and decrease bank capital. C) decrease bank profits and increase bank capital. D) decrease bank profits and decrease bank capital.
The classical theory of aggregate supply where markets are perfectly flexible
a. may or may not be compatible with the Keynesian system. b. is easily added the IS-LM framework of aggregate demand. c. is fundamentally incompatible with the Keynesian system. d. is consistent with the IS-LM framework if all shocks are to the IS curve. e. none of the above.
Governmental rules that significantly promoted entrepreneurship first became prominent during the
a. Great Recession. b. Age of Enlightenment. c. Great Depression. d. Industrial Revolution.
Define the following terms and explain their importance to the study of economics:
a. regressive tax b. proportional tax c. progressive tax d. direct tax e. indirect tax