The primary source of earnings of commercial banks is income derived from
a. the checking account services provided to customers.
b. the use of deposits to extend loans and undertake investments.
c. vault cash and deposits held with the Fed.
d. services provided to the U.S. Treasury.
B
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If people leave bequests primarily because they are uncertain about the timing of their deaths,
A) the marginal propensity to consume out of a temporary change in income would tend to be higher than in the simple version of the LCH. B) unrealized capital gains from higher housing prices will probably lead to a higher consumption-to-income ratio than in the simple version of the LCH. C) increases in wealth from the stock market would be consumed over a longer time horizon than in the simple version of the LCH. D) A and C are both correct.
Tax incidence on buyers and sellers is determined by: a. the relative elasticities of demand and supply. b. the amount of tax imposed by the government. c. the deadweight loss of tax
d. the type of tax system operating in an economy.