Banks do not hold a lot of their assets in the form of cash mainly because of:
A. it can encourage employee theft.
B. the fear of being robbed.
C. regulation.
D. the opportunity cost of holding cash; cash does not earn interest.
Answer: D
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The Federal Reserve System has
A) 50 district banks. B) 12 district banks. C) 24 district banks. D) 7 district banks.
A union can influence the equilibrium wage rate by:
a. collective bargaining. b. featherbedding. c. lobbying for legislation to reduce immigration. d. all of these.
The largest single portion of state and local budgets is devoted to
a. State and local defense. b. Health and public welfare programs. c. State and local unemployment compensation. d. Education. e. Interest payments on state and local debt.
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower