Biology Forums - Study Force

A banking system that provides people immediate access to their deposits, but that allows banks to hold only a portion of those deposits on reserve, is known as:
 a. an excess reserve system.
  b. a fractional reserve system.
  c. the Fed.
  d. the FDIC.
  e. an asset-based system.

QUESTION 2

Which of the following explains why higher prices in the goods and services market measured by the CPI leads to an upward-sloping aggregate supply curve?
 a. The higher prices will temporarily improve profit margins because the cost of wages and salaries are fixed in the short run.
  b. The higher prices will reduce the purchasing power of the fixed quantity of money and, thereby, stimulate additional output.
  c. The higher prices will expand the economy's resource base and, thereby, stimulate additional output.
 d. The higher prices will improve technology and, thereby, stimulate additional output.

QUESTION 3

If the fractional reserve system did not exist,
 a. the banking system could not create money.
  b. there would be no effect on the ability of the banking system to create money.
  c. banks would loan out its required reserves.
  d. banks would be highly susceptible to bank runs.
  e. the banking system would realize the money multiplier.

QUESTION 4

Which of the following is infrastructure?
 a. IBM computer plant. b. Training and education.
  c. Services of doctors. d. None of these.

QUESTION 5

The short-run aggregate supply curve is upward-sloping because:
 a. the quantity of real output supplied is inversely related to aggregate supply.
 b. nominal incomes are fixed.
 c. of the conjunction between the incremental capital-output ratio and the interbank offer rate.
  d. an increase in price will increase the supply of money.

QUESTION 6

Which of the following is infrastructure?
 a. Schools. b. Roads.
  c. Public health and sanitation services. d. All of these.

QUESTION 7

The balance sheet for a commercial bank shows the bank's:
 a. required reserves as assets and excess reserves as liabilities.
  b. loans as assets and required reserves as liabilities.
  c. loans as assets and checkable deposits as liabilities.
  d. checkable deposits as assets and loans as liabilities.
  e. excess reserves as assets and required reserves as liabilities.

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