Bond A and Bond B are identical except Bond B has a longer term. Therefore, we expect Bond _____ to pay a higher rate of interest

Banking under a fractional reserve system is inherently risky, but

a. safe if banks are allowed to make profits. b. regulation removes all danger of failures. c. is always safely done with modern management. d. is made safer with cautious and prudent management.

If you deposit $500 into a savings deposit, the immediate effect (do not consider the money multiplier which we will study in the next chapter) is:

a. M1 rises, M2 rises, and the monetary base remains the same. b. M1, M2, and the monetary base rise. c. M1, M2, and the monetary base fall. d. M1, M2, and the monetary base remain the same. e. M1 falls, M2 remains the same, and the monetary base remains the same.