By law, banks are required to
A) hold 100 percent of customer deposits as reserves.
B) hold a fraction of demand deposits as reserves.
C) hold a fraction of their reserves at the Federal Reserve bank.
D) lend out no more than the amount of their required reserves.
B
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The nation's production possibilities frontier is bowed outward. Suppose that the government decides to increase the production of armaments by $20 billion, and that as a result the output of consumer goods falls by $20 billion
If a further $20 billion increase beyond the initial $20 billion increase in armaments output is sought, we can expect that the output of consumer goods and services will fall further by A) less than $20 billion. B) $20 billion. C) more than $20 billion. D) There is not enough information to determine the answer.
Hedge funds have been criticized for
A) their heavy use of short selling. B) their inability to mobilize a large amount of funds. C) forcing quick price changes that reduce market inefficiencies. D) excessive use of hedging strategies.
Here is what we know about a household: wages $25,000, unemployment insurance benefits $3,000, dividend income $4,000, income tax $5,000. What is the contribution to GDP of this household following the expenditure approach?
A) $24,000 B) $25,000 C) $28,000 D) $29,000
The creation of a new product or process, often facilitated by the knowledge of engineering and scientific relationships, is known as
a. invention. b. innovation. c. application. d. sublimation.