Which of the following correctly describes fractional reserve banking?
a. The federal government only insures a fraction of the deposits at most banks.
b. Banks keep a fraction of their loans with other banks to maintain the quality of their loan portfolio.
c. Banks can loan out all but a small fraction of its own money, but must hold all money deposited at the bank on reserve in bank vaults.
d. Banks can loan out all but a fraction of its own money, but must hold all money deposited at the bank on reserve in bank vaults.
d
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In the United States the poorest 20 percent of households receive about ________ of total income
A) 1 percent B) 4 percent C) 10 percent D) 15 percent
A firm has $200,000 to spend on either direct sales or advertising. Suppose further that if the $200,000 is spent on direct sales, it will bring in an accounting profit of $40,000. Instead, the (accounting) profit it could obtain from a $200,000 investment in advertising is $X. Compare the profitability of the two options if (a) X = 50,000, (b) X = 30,000, or (c) X = 40,000.
What will be an ideal response?
Holding other factors constant, if food prices decline relative to the prices of other products, then the real wages of agricultural workers will ________ and employment of agricultural workers will ________.
A. increase; increase B. decrease; decrease C. increase; decrease D. decrease; not change
If a firm makes an economic profit, it is making at least a normal rate of return.
Answer the following statement true (T) or false (F)