Scenario 29-1 The Monetary Policy of Tazi Is Controlled by the Country's

question 128

Multiple Choice

Scenario 29-1
The Monetary Policy of Tazi is controlled by the country's central bank known as the Bank of Tazi. The local unit of currency is the Tazian dollar. Aggregate banking statistics show that collectively the banks of Tazi hold $375 million of required reserves, $225 million of excess reserves, have issued $7,500 million of deposits, and hold $750 million of Tazian Treasury bonds. Tazians prefer to use only demand deposits and so all money is on deposit at the bank.
-Which of the following will help to prevent bank runs?

• A)A 0% reserve requirement
• B)100% reserve banking
• C)Lack of government insurance of deposits
• D)Fractional reserve banking

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Assembly Line

A manufacturing process in which parts are added to a product in a sequential manner to create a finished product much more efficiently than with individual craftsmanship.

Average Product

The output per unit of input, typically calculated by dividing total product by the quantity of input used in its production.

Marginal Product

The additional output gained by employing one more unit of input, such as labor or capital.