Which of the Following Statements Is True for the Consumer

question 13

Multiple Choice

Which of the following statements is true for the Consumer Product Safety Act (CPSA) of 1972?

• A) It can regulate consumer products but does not have the power to ban any products.
• B) It established the Consumer Product Safety Commission (CPSC), an independent regulatory agency which is the main federal agency concerned with product safety.
• C) Its authority covers products such as motor vehicles and equipment, firearms, aircraft, boats, drugs, cosmetics, and food products.
• D) It cannot be used by the CPSC to bring suit in federal district court to eliminate the dangers presented by imminently hazardous consumer products.

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Definitions:

Required Reserve Ratio

The fraction of deposits that banks are required to hold in reserve, either in their vaults or at the central bank, to ensure that they can meet withdrawal demands.

Simple Money Multiplier

A formula that estimates the maximum amount of money that banking can generate with each dollar of reserves.

Required Reserve Ratio

The fraction of deposits that banks are required by law to keep on hand or with the central bank, rather than lend out.

Money-Creation Process

The mechanisms through which new money is produced and introduced into the economy, primarily conducted by central banks and commercial banks.