If we are going to get the most value from our resources, entrepreneurs should choose the investment alternatives that
A) are most heavily subsidized by the government.
B) yield a profitable rate of return.
C) result in the production of the largest possible output regardless of value to consumers.
D) reduce the value of resources and retard wealth accumulation.
B) yield a profitable rate of return.
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Suppose a commercial banking system has $240,000 of outstanding checkable deposits and actual reserves of $85,000. If the reserve ratio is 25%, the banking system can expand the supply of money by a maximum of
A. $5,000. B. $25,000. C. $75,000. D. $100,000.
A rightward shift of a demand curve is called a(n):
a. increase in demand. b. decrease in demand. c. increase in quantity demanded. d. decrease in quantity demanded. e. increase in supply.
In the long run,
a. fiscal policy has no effect on the labor force participation rate. b. lower tax rates can lower the labor force participation rate. c. less generous transfer payments can raise the labor force participation rate. d. higher tax rates can raise the labor force participation rate. e. None of the above
Which statement is false?
A. Most savings and loan associations were locked into low-interest-rate mortgages in the 1950s and 1960s. B. To get a bank charter, you need to demonstrate that your community needs a bank or an additional bank. C. Nearly all banks today are regulated by both the Federal Reserve and the FDIC. D. The FDIC would rather pay off depositors than be forced to find another bank to take over a failing institution. E. Money is created when someone takes out a bank loan.