Why is it assumed that loans made in the form of check able deposits will cause money to flow into other banks?
What will be an ideal response?
Individuals and business firms do not borrow money and pay an interest rate on their loan just to let the money sit in a bank. When they withdraw the money and spend it, the recipient is likely to deposit the money in the same or another bank.
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Under both perfect competition and monopoly, a firm:
a. is a price taker. b. is a price maker. c. will shut down in the short-run if price falls short of average total cost. d. always earns a pure economic profit. e. sets marginal cost equal to marginal revenue.
In a perfectly competitive market, the long-run industry supply curve is perfectly elastic at the minimum point of the ATC curve
a. True b. False Indicate whether the statement is true or false
When can two countries gain from trading two goods?
a. when the first country can only produce the first good and the second country can only produce the second good b. when the first country can produce both goods, but can only produce the second good at great cost, and the second country can produce both goods, but can only produce the first good at great cost c. when the first country is better at producing both goods and the second country is worse at producing both goods d. Two countries could gain from trading two goods under all of the above conditions.
The "depreciation rate" tells us
A) the interest rate that should be used in present discounted value calculations. B) the rate at which consumers deplete their total wealth in retirement. C) the difference between current and expected income. D) the difference between current and expected profits. E) how much usefulness a machine loses from year to year.