The fractional reserve banking system requires that banks hold a certain fraction of their _______ in reserves.
Fill in the blank(s) with the appropriate word(s).
deposits
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Refer to Scenario 1-2. Using marginal analysis terminology, what is another economic term for the incremental revenue received from the sale of the last 500 cigars?
A) sales revenue B) gross earnings C) marginal revenue D) gross profit
The principle of diminishing marginal utility says that:
a. as more of a good or service is consumed, demand decreases. b. as more of a good or service is consumed, the price will rise. c. the marginal utility of additional units consumed increases. d. an increase in income causes demand to increase. e. the marginal utility of additional units consumed decreases.
Samuelson and Solow argued that
a. high unemployment puts upward pressures on wages and prices. b. given the historical evidence, a combination of low inflation and low unemployment was not possible. c. Both A and B are correct. d. None of the above are correct.
People accused of a crime frequently claim their innocence. Even if guilty they will sometimes agree to take a lie detector test to see if they can be exonerated. While they may know that these tests do not carry much weight in court there is another reason why they are willing to take the test. Give another valid reason from this chapter explaining why a guilty person would agree to the test.
What will be an ideal response?