Banking under a system of fractional reserves is a(n)
A. inherently risky business that is unsafe regardless of bank management.
B. inherently risky business that is relatively safe under prudent management.
C. fairly safe business unless management is irresponsible.
D. fairly safe business with no unusual risks.
Answer: B
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When you purchase a new surfboard you do so in the
A) factor market. B) input market. C) product market. D) resource market.
The FDIC handles most bank failures by the purchase and assumption method because
A) the existence of uninsured deposits (over $100,000 ) makes runs and panics possible. B) it allows the FDIC to avoid paying off large deposits when a bank fails. C) most banks have become too big for the FDIC to allow them to fail. D) it allows the FDIC to write checks legally to pay all deposits, even those over $100,000.