The basic truth that underlies the study of economics is the fact that we all face:

One of the essential functions that a bank performs is

A) transferring money from savers to lenders. B) owning assets like real estate. C) purchasing government bonds. D) creating deposits by lending required reserves.

In a labor-market pooling equilibrium with high-skill and low-skill workers and where a costly educational degree is used as a signaling device, all else equal, an increase in the wage differential between high- and low-skill workers leads to

A) an increase in the required minimum share of high-skill workers. B) a decrease in the required minimum share of high-skill workers. C) no change in the required minimum share of high-skill workers. D) None of the above answers are correct.