A banking system that provides people immediate access to their deposits, but that allows banks to hold only a portion of those deposits on reserve, is known as
a. an excess reserve system
b. a fractional reserve system
c. the Fed
d. the FDIC
e. an asset-based system
B
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Which of the following is NOT an example of a backup line of credit?
A) loan commitments B) overdraft privileges C) standby letters of credit D) mortgages
Money facilitates trade because
a. it eliminates the need for specialization b. it prevents people from taking advantage of each other c. it serves as a medium of exchange d. division of labor allows money to be produced at a lower cost e. people do not benefit from barter unless money is used
Suppose you sold 20 futures contracts at a price of $5.00 per bushel and suppose the maintenance margin is $1300 per contract. At the end of the first trading day when the price fell from $5.00 to $4.80 per bushel, the amount of the margin call you had to make is
A. $0 B. $10,000 C. $20,000 D. $6,000.
Which of the following government actions can hinder the economic development of a country?
A. It inhibits the growth of the financial and banking sector. B. It implements policies that increase inflation rates in a country. C. It adopts policies that effectively tax exports. D. All of these are correct.