Answer the following questions true (T) or false (F)
1. Corporations are legally owned by their shareholders.
2. Corporate managers and shareholders always have the same goals.
3. When a business is set up as a partnership, the owners of the business face limited liability.
1. TRUE
2. FALSE
3. FALSE
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The money supply known as M2:
a. includes large denomination time deposits. b. excludes interest-earning checking accounts in savings and loans. c. does not include money market mutual accounts. d. includes savings accounts and small denomination time deposits. e. includes large denomination repurchase agreements.
Good X is a normal good if an increase in income leads to
A. a decrease in the supply for good X. B. an increase in the demand for good X. C. a decrease in the demand for good X. D. an increase in the supply for good X.
Fractional reserve banking can be thought of as a bank
A. holding deposits equal to its net worth. B. withholding a portion of its total deposits that are not loaned out. C. loaning out all of its reserves. D. paying a fraction of its profit to depositors.
Typically, increasing the difference between the discount and federal funds rates causes
A) an increase in market interest rates. B) high corporate profits. C) no change in interest rates. D) a boom in the economy.