A rational decision is one that
A. satisfies all desires.
B. avoids the intentional allocation of resources.
C. assigns available resources in the manner most preferred by decision makers.
D. assigns available resources to the uses with the lowest opportunity costs.
Answer: C
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Which of the following are part of a commercial bank's reserves?
I. cash in the bank's vaults II. loans III. cash in checking accounts A) I only B) I and II C) I and III D) I, II and III
Which of the following is the relationship between the required reserve ratio (RRR) and the demand deposit multiplier?
a. The demand deposit multiplier = 1/RRR b. The demand deposit multiplier = RRR ? change in reserves c. The demand deposit multiplier = 1/(1 + RRR) d. RRR = demand deposit multiplier e. The demand deposit multiplier = 1/(1 - RRR).