At the End of World War II in 1945,many Economists

question 198

Multiple Choice

At the end of World War II in 1945,many economists and business managers expected that the U.S.economy would enter a severe recession.At that time,Sears and Montgomery Ward were the two largest department store chains in the country.Sears CEO Robert Wood expected continuing prosperity and opened new stores.Montgomery Ward CEO Sewell Avery expected falling incomes and rising unemployment and closed a number of existing stores.The results of their actions were seen during the late 1940s,when

• A)Sears declared bankruptcy and was purchased by Montgomery Ward.
• B)Montgomery Ward weathered the economic downturn in better financial shape than Sears.
• C)Sears rapidly gained market share at Montgomery Ward's expense.
• D)Sears had to close many of the new stores it had opened following the end of the war.

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Definitions:

Required Reserve Ratio

The fraction of deposits that banks are mandated by the central bank to keep on hand as reserves, rather than loaning out.

Total Reserves

The sum of a bank's deposits held at the central bank and the cash held in vaults.

Checkable Deposits

Refers to deposits in bank accounts from which individuals can write checks or use debit cards to make purchases directly.

Required Reserves

The minimum amount of funds that a bank must hold in reserve against deposits, as mandated by central banking regulations.