Don’t pay attention to what I put. I was just guessing. Blackboard QUESTION 1 A

Question

Don’t pay attention to what I put. I was just guessing. Blackboard QUESTION 1 A one-time deposit in a bank will result in e a an expansion in the money supply that is larger than the size of the one-time deposit e b no expansion in the money supply e c an expansion in the money supply that is equal in size to the one-time deposit. dan expansion in the money supply that is smaller than the size of the one-time deposit. QUES ION 2 One of the main reasons that banks exist is to deal with the issues of and a. biased selection: profiling b adverse selection: moral hazard ec morality: natural selection o d natural selection, moral hazard QUESTION 3 The ease of being able to convert one asset into another asset especially into money, is referred to as a convertability b monetization . c fluidity d liquidity

Explanation / Answer

1. a. an expansion in the money supply that is larger than the one time deposit

2. b. adverse selection, moral hazard

3. d. liquidity

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