Banks hold capital because
A) they are required to by regulatory authorities.
B) higher capital increases the returns to the owners.
C) it increases the likelihood of bankruptcy.
D) higher capital increases the return on equity.
A
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U.S. residents come to believe that the dollar will appreciate in the future, that is, the exchange rate in the future will be higher than the current exchange rate. As a result
A) the demand curve for dollars shifts rightward. B) the demand curve for dollars shifts leftward. C) there is a movement downward along the demand curve for dollars. D) None of the above answers are correct.
Holding everything else constant, the demand for a good tends to be more elastic
A) the more substitutes there are for the good. B) the less important the product is in consumers' budgets. C) the shorter the time period involved. D) the more consumers perceive the good to be a necessity.