One aspect of bank accounting is that many liabilities of banks are
a. assets of other persons and businesses in the economy.
b. also liabilities of other persons and businesses in the economy.
c. not matched by liabilities of most other banks.
d. not actually owed to any other person or business in the economy.
a
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Adding the assumption of pure competition and complete flexibility of all prices and wages to the rational expectations hypothesis yields a theory that provides support for
A) passive policy making. B) active policy making. C) discretionary policy making. D) unemployment reducing policy making.
Figure 11-6
The industry described in Figure 11-6
A. is not a natural monopoly because no firm would produce in the long run unless the government intervened in the market. B. is not a natural monopoly because the average total cost curve is U shaped. C. is a natural monopoly because the economic profit is positive for a monopolist if the government doesn’t intervene. D. is a natural monopoly because price is less than average total cost at the output that would be produced by the industry under perfect competition.
If the price elasticity of demand for cigarettes is 0.4,
A. A 5 percent decrease in price will cause quantity demanded to rise by 10 percent. B. The demand is inelastic. C. The demand is elastic. D. A 10 percent increase in price will cause quantity demanded to fall by 40 percent.
Assume that the income effect dominates the substitution effect. When wages rise
A. people will work more hours. B. the effect on the hours people work is ambiguous. C. people will work the same number of hours. D. people will work fewer hours.