Excess reserves of banks equal
a. actual reserves minus required reserves.
b. actual reserves minus demand deposits.
c. assets minus the liabilities of the banks.
d. required reserves minus actual reserves.
A
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A depository institution creates liquidity and pools risk
Indicate whether the statement is true or false
Jim recently graduated from college. His income increased dramatically;from$5000 a year to $60,000 a year. Jim decided that instead of using the bus, he would buy himself a car. This implies that
a. The car is a normal good for Jim b. The car is an inferior good for Jim c. He is equally happy between using the bus and buying a car d. None of the above
Happiness is ______ correlated with income.
a. positively b. negatively c. not d. universally
The paradox of thrift refers to the idea that
A. people who save are usually those who cannot afford it. B. as people become more thrifty, incomes may fall. C. the thrift industry (banks and savings and loans) wants some people to save so that others may borrow. D. saving is necessary for economic development.