If a bank's return on equity remains constant, but the ratio of bank assets to bank capital increases:
A. the bank's assets and capital must have increased by the same percentage.
B. the bank's return on assets must have decreased.
C. the bank's return on assets must have increased.
D. the bank must be unprofitable.
Answer: B
You might also like to view...
The dominant Keynesian view of the 1960s and 1970s stressed that
A) changes in government spending and budget deficits can help stabilize an economy. B) the "invisible hand" would be sufficient to lift the economy out of an economic downturn. C) government should avoid budget deficits at all times as they may destabilize the economy. D) both budget deficits and surpluses should be small relative to the size of the overall economy.
The economic explanation that is given by Nobel laureate economist Ronald Coase for why community property is polluted more often than private property is that
A. people ignore what is not right in front of them. B. damaging private property indirectly affects individuals' wealth, whereas damaging community property directly affects their wealth. C. people are not made aware of their actions toward community property. D. damaging community property indirectly affects individuals' wealth, whereas damaging private property directly affects their wealth.
The real-nominal principle states that:
A. people respond more to explicit, or real, costs than to implicit costs. B. people respond more to implicit costs than to explicit costs. C. what matters to people is the face value of money or income. D. what matters to people is the purchasing power of money or income.
The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. What is the marginal social benefit from the 300th dozen doughnuts each day?
A) $10.00 per dozen B) $8.00 per dozen C) $6.00 per dozen D) $4.00 per dozen