Actions by the Second Bank of the United States:
a. reduced the discount rate on state bank notes.
b. increased the discount rate on state bank notes.
c. created inflation.
d. effectively ended the use of state bank notes.
a. reduced the discount rate on state bank notes.
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The costs of ensuring that the parties live up to the promises they made in bargaining are called
A) search costs. B) collectivization costs. C) negotiation costs. D) monitoring and enforcement costs.
The basic concepts used in the analytic framework of this text include all of the following EXCEPT
A) the not-for-profit nature of most financial institutions. B) a basic supply and demand analysis to explain the behavior of financial markets. C) an approach to financial structure based on transaction costs and asymmetric information. D) the concept of equilibrium.
The linkage between high productivity and high earnings is vitally important because
a. it provides individuals with a strong incentive to develop skills and engage in activities that others value highly. b. high productivity (a large output per hour worked) is the key to high living standards. c. it brings the self-interest of individuals into harmony with economic progress. d. all of the above are true.
Suppose that Milton likes to consume one glass of milk with every three chocolate chip cookies. For Milton, an additional cookie has no value unless he can consume it with the appropriate proportion of milk. Milton's indifference curves for milk and cookies are
a. right angles. b. bowed inward. c. bowed outward. d. downward-sloping straight lines.