What does a "fractional reserve banking system" mean?
(A) One that must keep most deposited money in reserve.
(B) One that uses fractional paper currency as well as coins.
(C) One that keeps only a small part of customers' deposits on hand.
(D) One that is required to report daily deposits to the Federal Reserve.
Ans: (C) One that keeps only a small part of customers' deposits on hand.
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National health care programs are not as effective as they could be because:
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Consider a Stackelberg duopoly with the following inverse demand function: P = 100 ? 2Q1 ? 2Q2. The firms' marginal costs are identical and are given by MCi(Qi) = 2. Based on this information, the leader's reaction function is:
A. r1(Q2) = 24.5 ? 0.5Q2 and r1(Q2) = 24.5 ? 0.5Q1. B. Q1 = 49 ? 0.5Q2 and Q2 = 49 ? 0.5Q1. C. The Stackelberg leader does not react to the output decision of its rival. D. r1(Q2) = 24.5 ? 0.5Q1 and r2(Q1) = 24.5 ? 0.5Q2.
The amount of money banks can loan out is determined by the discount rate.
Answer the following statement true (T) or false (F)