In a fractional-reserve banking system, a bank
a) does not make loans.
b) does not accept deposits.
c) keeps only a fraction of its deposits in reserve.
d) None of the above is correct.
Ans: c) keeps only a fraction of its deposits in reserve.
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Moving from left to right, a U-shaped curve starts with a
A) negative slope, reaches a minimum, then ends with a positive slope. B) negative slope, reaches a minimum, then ends with a negative slope. C) positive slope, reaches a maximum, then ends with a negative slope. D) negative slope, reaches a maximum, then ends with a positive slope. E) positive slope, reaches a minimum, then ends with a negative slope.
Which of the following societies is the most likely to have a traditional economy?
a. The United States. b. The Inuit (native people of Northern Canada). c. Cuba under Castro's rule. d. Modern-day Hong Kong.
The international organization that replaced the General Agreement on Tariffs and Trade (GATT) is the
a. World Bank. b. Export-Import Bank. c. World Trade Organization. d. International Monetary Fund.
If bank with leverage of 8 to 1 increases its assets by adding $1 to capital for every $1 added to assets:
A. leverage decreases. B. leverage increases. C. the answer cannot be determined from the information in the question. D. leverage stays constant.