A system by which firms assign their customers for collection purposes to regional banks that transfer funds to a central bank is known as:
A) A lock-box system
B) A zero-balance account
C) A wire transfer
D) Concentration banking
Answer: D) Concentration banking
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Suppose there currently is an inflationary gap. What could the government do to bring the overall price level down?
A) nothing B) Reduce government spending. C) Increase government spending. D) Reduce the nation's aggregate supply.
Society's core economic problem is
a. the role of government in the economy b. a scarcity of land, labor, and machinery to produce goods and services c. the federal budget deficit d. an unequal distribution of income e. low living standards
Within the Keynesian model, when total spending is less than the full-employment level of output, firms will
a. continue to produce the current level of output. b. cut production to reduce their inventory accumulation. c. expand production to reduce their inventory accumulation. d. cut production to build inventories.
A higher exchange rate value of the dollar reduces inflation but has a contractionary effect on the economy.
Answer the following statement true (T) or false (F)