Question 4526:

Given that the cash reserve ratio is 10 per cent, what is the maximum amount of money that the banking system can create from an initial cash deposit of #1,000.00?

A. # 100.00
B. # 1,000.00
C. #9,000.00
D. #10,000.00

Question 4527:

A society which forgoes present consumption ____________

A. Is forced to do so because of excessive consumption within the country in the past
B. Is devoting new resources to new capital formation
C. Is merely devoting resources to the replacement of capital
D. Expects to consume only that amount tomorrow which was forgone today

Question 4528:

The demand for commodities that possess identical utilities is ____________

A. Composite
B. Competitive
C. Joint
D. Derived
E. None of the above

Question 4529:

The circular flow of income defines the ____________

A. Relationship between ends and means in the economics system
B. Allocation of income to various members of the household
C. Flow of goods, services and money among various macrosectors of the economy
D. Micro-economic relationships in economic analysis

Question 4530:

The value of money depends primarily on ____________

A. The gold backing of the currency
B. The gold backing of both currency and deposits
C. The general price level
D. Government decree that it is legal tender