Banking under a fractional reserve system is inherently risky, but
a. safe if banks are allowed to make profits.
b. regulation removes all danger of failures.
c. is always safely done with modern management.
d. is made safer with cautious and prudent management.
d
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Behavioral economics:
A. draws on insights from psychology to expand models of individual decision making. B. draws on insights from anthropology to clarify models of individual decision making. C. draws on insights from business theory to expand models of household behavior. D. is the least disputed field of economics.
Answer the next question using the following budget information for a hypothetical economy. All data are in billions of dollars. Government SpendingTax RevenuesGDPYear 1$800$825$4,000Year 28508504,200Year 39008754,350Year 49509004,500Year 51,0009254,600In which year is there a balanced budget?
A. Year 1 B. Year 2 C. Year 3 D. Year 4
Which of the following groups would be aided by a depreciation of the American dollar?
A. Foreign producers of goods imported by the United States. B. U.S. importers of goods from abroad. C. American producers of goods for export. D. Foreign workers.
Higher interest rates:
a) increase consumption and investment spending. b) decrease consumption and increase investment spending. c) decrease consumption and investment spending. d) increase consumption and decrease investment spending.