Banks are firms who are in business, like butchers, bakers, and candlestick makers, to make profit. They accept deposits from savers and use those deposits to make loans to borrowers. The profit they make is
a. their excess reserves, remaining in the bank after loans are made
b. regulated by the FDIC
c. regulated by the Federal Reserve System
d. the difference between the interest rate they pay to their borrowers and the interest rate they charge to their depositors
e. the difference between the interest rate they pay to their depositors and the interest rate they charge to their borrowers
E
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The statement "The unemployment rate for teens is higher than that for adults" is
A) a political statement. B) a positive statement. C) a normative statement. D) an ethical statement.
The production possibilities curve depicts the various combinations of two goods that can be:
a. interchanged among two countries. b. produced with a given technology. c. consumed with a given quantity of resources. d. produced with increments in resources and changes in technology. e. consumed as the resources increase.
If a country's saving rate declined, then other things the same, in the long run, the country would have lower productivity and lower real GDP per person.
a. true b. false
If the Federal Reserve targets the money supply, and the money demand curve shifts to the left, then the Fed
A) cannot maintain the money supply target. B) can maintain the money supply target, but at a lower interest rate. C) can maintain the money supply target, but at a higher interest rate. D) can maintain the money supply target with no change in the interest rate.