The “efficiency of the payments mechanism” refers to
A. the ease and speed of exchanging money for goods and services.
B. how fast member banks replenish required reserves.
C. how fast banks pay interest on deposit accounts.
D. how fast countries pay off foreign debts.
Answer: A
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The total fixed cost remains constant as which of the following varies (as depicted on the x-axis of the relevant graph)?
A. cost of resources B. time C. output in a given period of time D. profit
When the Fed buys federal government securities on the open market from commercial banks, over time, the:
A. assets of these banks fall. B. liabilities of the bank fall. C. assets of the banks rise. D. liabilities of the bank rise.
Explain why opportunity cost is the best forgone alternative and provide examples of some opportunity costs that you have faced today
What will be an ideal response?
Moral hazard can contribute to high bank leverage in all of the following ways EXCEPT
A) having high capital requirements. B) bank managers are compensated in part on providing shareholders with high returns on equity. C) high bank leverage provides shareholders with a potential for a higher return on equity. D) federal deposit insurance has reduced the incentive of depositors to monitor the behavior of bank managers.