When the Receipts Given by Goldsmiths to Depositors Were Used

question 170

Multiple Choice

When the receipts given by goldsmiths to depositors were used to make purchases,

• A) the gold standard was created.
• B) existing banking laws were violated.
• C) the receipts became in effect paper money.
• D) a fractional reserve banking system was created.

---

Definitions:

Purely Competitive Firm

A company that operates in a market where there are many buyers and sellers, each selling a homogeneous product with no single seller or buyer having the market power to influence prices.

Long-run Equilibrium

A state in which all economic forces such as supply and demand are balanced, and all firms are producing at a level where no new entrants will disrupt the market.

Minimum ATC

The lowest point on the average total cost curve, representing the most efficient scale of production for a firm.

Creative Destruction

A term coined by Joseph Schumpeter to describe the process by which old industries are destroyed and new ones are created as part of the evolution of capitalism.