Identify the five core principles of Money and Banking.
What will be an ideal response?
#1) Time has value; #2) Risk requires compensation; #3) Information is the basis for decisions; #4) Markets determine prices and allocate resources; #5) Stability improves welfare.
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The discount rate is
A) the interest rate paid when a bank borrows reserves from another bank. B) the interest rate paid when a commercial bank borrows reserves from the Fed. C) the reduction in the interest rate given to the bank's best customers. D) another name for the long-term interest rate. E) the interest rate the Fed pays banks for the reserves the banks keep at the Fed.
Fiscal policy refers to a government's choices over its
A) expenditures, taxes, transfers, and borrowing. B) expenditures, taxes, issuance of money, and borrowing. C) expenditures, foreign affairs, issuance of money, and borrowing. D) issuance of money, taxes, environmental regulations, and foreign affairs.
If a college degree is used to signal high ability, but the cost of a college degree is relatively high,
A) a separating equilibrium is achieved. B) a pooling equilibrium is achieved. C) even low-ability workers will attend college. D) the share of high-ability workers must be 1.
If a firm is earning negative accounting profits, it implies
a. That the firm's economic profits are zero b. That the firm's economic profits are positive c. That the firm's economic profits are negative d. More information is needed to conclude about economic profits