Making a Statement About an Equitable or Inequitable Distribution of Income

question 191

Multiple Choice

Making a statement about an equitable or inequitable distribution of income:

• A) requires a value judgment.
• B) involves efficiency judgments.
• C) involves positive judgments.
• D) requires the measurement of demand and supply curves.

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Definitions:

Reserve Ratio

The fraction of depositors' balances that banks must have on hand as cash, a requirement determined by the central bank.

Money Multiplier

The mechanism by which the base money supply is expanded through the banking system's ability to lend and create deposits.

Reserve Ratio

The portion of depositors' balances that banks must have on hand as cash.

Bank Leverage

The ratio of a bank's total debt to its equity capital, indicating the extent to which bank funding is used to finance its assets.