A single bank is limited in its ability to create money because
a. loan recipients usually take the proceeds of the loan in cash.
b. the FDIC will not permit it to create money unless the loans are guaranteed by the federal government.
c. the money loaned will probably be deposited in another bank.
d. federal legislation prohibits banks from creating money except to finance international trade.
c
You might also like to view...
"Opportunity cost" is
A) the monetary cost of one's actions. B) the objective cost of one's actions. C) the regret one feels when making a sacrifice. D) the value one places on the item, project, or plan he has chosen to pursue. E) none of the above.
As an individual moves northwest along an indifference curve substituting more and more Y for X, his or her MRS of X for Y
a. increases. b. decreases. c. stays the same. d. changes in a way that cannot be determined.
Economists:
A. are not concerned with the distributional effects of trade. B. disagree with laypeople that the distributional effects of trade are important. C. do not generally include the distributional effects of trade in their models. D. cannot measure the distributional effects of trade.
Shoe leather costs are
A. the costs associated with the confusion of prices as signals. B. the costs of changing prices, such as printing and mailing catalogues. C. the costs of the redistribution of wealth between lenders and borrowers. D. the costs in time and effort incurred by people and firms who are trying to minimize their holdings of cash because of inflation.