The fractional reserve system of banking evolved because
A. goldsmiths did not have safes large enough to hold all their gold deposits.
B. there was always a dire need for additional money.
C. goldsmiths knew that on any given day, only a few depositors would come to claim their deposits.
D. goldsmiths knew that they would not be prosecuted for lending out money they did not have.
Answer: C
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All of the following are true regarding an English auction except which one?
A) Bidders have a substantial amount of information regarding how other participants value the item. B) Bidders typically know who is participating in the auction. C) Bidders usually know the price that causes other participants to drop out of the auction. D) It is the most common type of auction in business settings.
One of the reasons that successful proprietors may be reluctant to borrow money from a bank to expand their business is that
a. expanded businesses generally generate lower rates of profit b. the bank would become a part owner c. unlimited liability cramps ambition d. the bank's liability insurance isn't sufficient to cover expected liabilities e. issuing stock to finance the expansion is less costly
The return to investment in human capital is observed
a. only when workers are assigned identical tasks. b. in the wage differential between workers. c. in the high school dropout rate in inner-city urban school districts. d. in the low wages of educated factory workers.
Use the information provided in Table 7.2 below to answer the question(s) that follow.
Table 7.2Inputs Required to Produce a Product Using Alternative Technologies
Refer to Table 7.2. If the hourly price of capital is $30 and the hourly wage rate is $5, which production technology should be selected?
A. A B. B C. C D. D