Because a bank has a very large pool of buyers and savers, it can:
A. diversify the risk of saving and borrowing for individuals.
B. provide liquidity to some individuals that deposit funds.
C. act in the best interest of society by ensuring there is enough money for people.
D. act as an intermediary between firms and government.
Answer: A
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Total cost includes
A) the cost of variable resources only. B) the cost of fixed resources only. C) the cost of both variable and fixed resources. D) the cost of neither variable nor fixed resources. E) all explicit costs and all the implicit costs that actually must be paid using money.
Assume that the M1 multiplier is 3.0 and the monetary base is $200 billion. If M1 is currently equal to $600 billion and the Federal Reserve wishes to raise the level to $690 billion, the monetary base should be expanded by
A) $60 billion. B) $30 billion. C) $20 billion. D) $10 billion.
An idea concerning production that eventually takes the form of a new applied technology is
a. the scientific method b. robots c. increasing cost of new technology d. innovation e. human capital
Data on the relationship between the percentage of the workforce unionized and the share of national income allocated to labor suggest that unionization has
a. greatly altered the labor-capital distribution of national income. b. increased the share of national income allocated to labor. c. had a positive effect on the wages of nonunion workers. d. had no significant impact on the share of income going to labor.