In an economic system with privately owned, profit-maximizing banks, there will always be a difference between
a. private profits and social profits.
b. bank profits and other corporate profits.
c. bank profits and macroeconomic objectives.
d. bank profits and government profits.
c
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The fraction of deposits that banks are required by law to hold and not lend out are called its
A) required reserves. B) net worth. C) excess reserves. D) reserves.
Explain the concept of causation with the help of a simple real-life example
What will be an ideal response?
If you were a government official that wanted to raise the equilibrium price of milk, which of the following actions would you take?
a. Take milk from government storage and sell it. b. Encourage farmers to produce more milk. c. Subsidize purchases of dairy equipment. d. Encourage farmers to produce less milk.
Theories or models of economic behavior are used to
a. explain very precise details about the economy b. predict economic events and develop economic policy c. predict consumer behavior but not market behavior d. all of the above