A bank run at a bank often triggers a chain reaction of runs on other banks in an economy
a. True
b. False
Indicate whether the statement is true or false
True
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There would be no excess burden from a tax if demand were
A. perfectly elastic. B. unitarily elastic. C. upward sloping. D. perfectly inelastic.
In the figure above, the shift in the aggregate demand curve from AD1 to AD3 could be the result of
A) a decrease in the real interest rate. B) a decrease in the buying power of money. C) an increased expectation of a recession that lowers the expected rate of profit from investment. D) a decrease in the foreign exchange rate. E) an increase in the price level.
The wealth effect explains the:
A. negative relationship that exists between consumer spending and overall price level. B. positive relationship that exists between consumer spending and overall price level. C. negative relationship that exists between consumer spending and overall asset valuation. D. positive relationship that exists between consumer spending and overall asset valuation.
An appropriate Keynesian response to a recessionary gap is to: a. decrease net taxes
b. decrease government spending. c. increase interest rates. d. increase the cash reserve ratio.