In the early 1990s, Serbia, a developing country, experienced hyperinflation because its central bank increased the money supply too rapidly. Serbia's central bank most likely adopted this monetary policy because:
A. it didn't care about inflation.
B. the Serbian government granted independence to the central bank.
C. the Serbian government had no other way to finance its expenditures.
D. it believed that its actions would not trigger inflation.
Answer: C
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A market shortage is
A. A situation in which producers cannot sell all the goods and services that they are willing and otherwise able to sell. B. The result of a price floor. C. The amount by which the cost of production exceeds the price of a good. D. The amount by which the quantity demanded exceeds the quantity supplied at a given price.
Since the 1920's, the ratio of assets to capital has almost tripled for commercial banks. Many economists believe this is the direct result of:
A. lower quality management in banks. B. allowing banks to offer non-bank services. C. the increase in branch banking. D. government provided deposit insurance.