In a ________ banking system, commercial banks engage in securities underwriting, but legal subsidiaries conduct the different activities. Also, banking and insurance are not typically undertaken together in this system
A) universal
B) British-style universal
C) short-fence
D) compartmentalized
B
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Let's assume producers in Canada can make 200 units of beef or 50 units of oranges, and U.S. producers can make 50 units of beef or 200 units of oranges per time period. Which country faces the lowest opportunity cost of producing beef?
A) The U.S. B) Canada C) Both countries D) Neither country
Suppose a firm has an investment project which will cost $200,000 and result in $30,000 profit. The firm will not undertake the project if the interest rate is
A) greater than 15 percent. B) greater than 10 percent. C) greater than 5 percent. D) positive.
Suppose an excise tax is imposed on two products X and Y, both of which have identical supply elasticities. The demand for good X is highly elastic, while the demand for good Y is highly inelastic. The deadweight loss (or excess burden) will be
a. equal in both cases. b. larger for good X than good Y. c. larger for good Y than good X. d. zero in both cases.
What is the effect on the rate of inflation of the Federal Reserve printing large quantities of currency?
A. increases the rate. B. has no effect on rate. C. decreases the rate.