When a bank takes savings from many small savers and lends it to many borrowers, the bank:
A. decreases the risk to savers through economies of scale.
B. decreases the risk to savers through diversification.
C. increases the risk to borrowers through high transaction costs.
D. decreases the return to savers and increases the cost to borrowers.
Answer: B
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In the long run, what is the tradeoff between inflation and unemployment? Explain your answer using Phillips curve analysis
What will be an ideal response?
Government policies that use taxes and government spending in an attempt to stabilize the economy are known as a. Trade policy
b. Regulatory policy. c. monetary policy. d. fiscal policy.
Jessica paid $7,000 for a bond with a face value of $6,000. She will be paid $400 annually as long as she holds on to the bond, until the bond's maturity date. The yield on the bond is
A) 6.67 percent. B) 5.71 percent. C) 15.0 percent. D) 80.0 percent.
Large banks in the United States:
A. may not keep more than 10% of deposits in reserve. B. are required to keep between 10% and 90% of deposits in reserve. C. are not required to keep any deposits in reserve. D. must keep at least 10% of deposits in reserve.