Fractional reserve banking occurs when:
a. a bank has reserves that exceed its deposits.
b. a bank has reserves that are equal to its deposits.
c. a bank has reserves that are less than its deposits.
d. some depositors lose their deposits through poor bank management.
e. some lenders fail to repay their loans.
QUESTION 2The slope of the per-worker production function diminishes as the amount of capital per-worker increases. This is a reflection of the law of _____.
a. increasing marginal returns
b. diminishing marginal returns
c. constant marginal returns
d. first diminishing then increasing marginal returns
e. demand
QUESTION 3The Celler-Kefauver Act strengthened the nation's antitrust approach to merger enforcement by:
a. making all mergers illegal.
b. making all conglomerate mergers illegal.
c. creating the Federal Trade Commission.
d. providing HHI guidelines the government could use to clarify antitrust enforcement.
e. amending the Clayton Act to include the purchase of assets with cash of another company as a potential antitrust violation.
QUESTION 4An important function of commercial banks is to _____.
a. print new currency
b. issue fiat money
c. mint coins
d. redeem currency for precious metals
e. make loans
QUESTION 5A decrease in the capitallabor ratio would result in:
a. higher labor productivity because labor does more work.
b. lower labor productivity because labor is working with relatively less capital.
c. higher labor productivity because labor is producing less capital and more of other goods.
d. lower labor productivity because more capital is available.
e. higher labor productivity because more capital is available.
QUESTION 6The Celler-Kefauver Act made it illegal to:
a. provide selective discounts.
b. set prices below marginal cost.
c. conspire to collude.
d. buy with cash a competitor's patents, plants, or equipment.
e. price discriminate.
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