The net worth of a bank is
A. equal to the value of assets.
B. equal to the value of deposits.
C. equal to the value of liabilities.
D. the value of assets less liabilities.
E. the value of loans and securities.
Answer: D
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Which of the following is likely to shift the credit demand curve of a computer manufacturer to the left, assuming all else equal?
A) An increase in the scale of production B) A decrease in the scale of production C) An increase in the real interest rate D) A decrease in the real interest rate
Everything else held constant, if a central bank makes an unsterilized ________ of foreign assets, then the domestic money supply will ________ and the domestic currency will appreciate
A) purchase; increase B) purchase; decrease C) sale; increase D) sale; decrease
The notion of reciprocity means that one nation will impose import restrictions on another in order to:
a. stimulate an increase in trade restrictions in the latter. b. stimulate a decrease in trade restrictions in the latter. c. eliminate trade restrictions immediately in both countries. d. improve the government revenue collections through tariffs in both countries. e. enforce standards of product quality in the latter.
When firms in a competitive market are experiencing zero economic profits, this is an indication that
A. There is currently no better way to use society's scarce resources. B. Accounting losses are being experienced by these firms. C. They should be producing a different product. D. They will eventually go bankrupt.