What is a fractional reserve system?
In order for banks to continue to do business in an orderly fashion and for depositors to have access to their deposits, the banks are required by law to keep cash on hand and reserves at the Federal Reserve in proportion to their checkable deposits. Banks must keep adequate cash reserves on hand to meet the needs of customers who wish to convert their checkable deposits into currency or spend them on goods or services.
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In the above figure, the short-run aggregate supply curve is SAS1. If technology advances, there is
A) an upward movement along SAS1. B) a downward movement along SAS1. C) a shift to SAS0. D) a shift to SAS2.
Historical episodes allow economists to illustrate and evaluate current economic theories
a. True b. False Indicate whether the statement is true or false
Voluntarism includes methods for dealing with pollution that
A. carry no legal authority. B. assume the public has been made aware of the environmental damage they are responsible for. C. involve trying to coerce polluters to reduce or eliminate pollution voluntarily. D. rely on neighborhood vigilantism.
In the short run, the demand for gasoline today is
A. unit elastic. B. very inelastic. C. very elastic.