The required reserve ratio is
a. the minimum fraction of vault cash balances that banks must hold as reserves.
b. the minimum fraction of all assets that banks must hold as reserves.
c. the minimum fraction of all liabilities that banks must hold as reserves.
d. the minimum fraction of checking account balances that banks must hold as reserves.
e. the minimum fraction of loans that banks must make sure are repaid.
D
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Governments exist to
A) maintain property rights. B) provide non-market mechanisms for allocating scarce resources. C) implement arrangements that redistribute wealth and income. D) all of the above.
A stand-by letter of credit issued by a bank is __________ of that bank
A) an asset B) a liability C) technically both an asset and a liability D) neither an asset nor a liability
Some reasons that firms may experience diseconomies of scale include
a. the firm is too small to take advantage of specialization b. large management structures may be bureaucratic and inefficient c. if there are too many employees, the work place becomes crowded and people become less productive d. having more employees doesn't mean there will be more raw materials to use in production e. average fixed costs begin to rise again
Which of the following are effects of an increase in government spending financed by a tax increase?
a. the tax increase reduces consumption; the change in the interest rate reduces residential construction b. the tax increase reduces consumption; the change in the interest rate raises residential construction c. the tax increase raises consumption; the change in the interest rate reduces residential construction d. the tax increase raises consumption; the change in the interest rate reduces residential construction