The fractional reserve system of banking started when goldsmiths began:
A. charging people who deposited their gold.
B. accepting deposits of gold for safe storage.
C. issuing paper receipts in excess of the amount of gold held.
D. using deposited gold to produce products for sale to others.
Answer: C
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Government ownership of property and resources in the United States is
A. about as common as it is in European countries. B. widespread; the United States is a leader in the amount of government ownership of resources. C. relatively rare; the United States is mostly privatized. D. rare but has been increasing rapidly as the United States catches up to other countries.
In an economy with ________, there are more prices than in an economy with ________
A) barter; money B) fiat money; commodity money C) fiat money; barter D) money; barter
Max has allocated $100 toward meats for his barbecue. His budget line and an indifference map are shown in the above figure. Which of the following best describes Max's preferences?
A) d > b > e B) d = b = e C) a = b > c D) a = b > e
Suppose production in Spain and Portugal are not subject to the law of increasing cost and that Spain specializes in shoes while Portugal specializes in meat. If the opportunity cost of producing a pair of shoes in Spain is 3 pounds of meat, then we know that
a. Portugal consumes more meat than shoes b. Spain consumes more meat than shoes c. The opportunity cost of producing shoes in Portugal is more than 3 meats d. The opportunity cost of producing shoes in Portugal is less than 3 meats e. The opportunity cost of producing meat in Portugal must be 3 shoes