Fractional reserve banking has three crucial features: bank profitability, bank discretion over the money supply, and bank exposure to runs

What is outsourcing?

A) The process of vertically integrating the factors of production. B) The process of selling products overseas bypassing import tariffs. C) The movement of production to affiliate firms outside of the country. D) None of the above.

Refer to Figure 11.1. Assume the economy is in equilibrium at 1 = 0. Other things equal, a surge in household wealth will result in a movement from point ________ to point ________

A) A; B B) B; A C) A; C D) A; D