Which of the following was used as money by European settlers in the American co
ID: 1203194 • Letter: W
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Which of the following was used as money by European settlers in the American colonies before the Revolutionary War ? tobacco paper money issued by the newly established Federal Reserve Bank runs in the United States during the 1930s damaged the economy because: capital requirements prevented bank managers from taking additional lending risks. the reserve ratio was set too high. the Federal Reserve system did not exist at the time. the loss of confidence at one bank quickly extended to other banks. The money multiplier is equal to: the ratio of the money supply to the monetary base. the money supply divided by the reserve ratio. about 3.9 in the United States. Federal funds are: government tax receipts. loans between banks. government expenditures. bank deposits at the Federal Reserve. Generally, the more liquid an asset is, the: lower its purchasing power. lower its rate of return. higher its capacity to store value over time. higher its rate of return. The interest earnings one gives up to hold more liquid assets are: an opportunity cost. a transaction cost. an asset of the company. a liability of the company.Explanation / Answer
22. Answer is b) only tobacco. This is because tobacco was colonial Virginia's most successful cash crop. The tobacco that the first English settlers encountered in Virginia—the Virginia Indians' Nicotiana rustica—tasted dark and bitter to the English palate; it was John Rolfe who in 1612 obtained Spanish seeds, or Nicotiana tabacum, from the Orinoco River valley—seeds that, when planted in the relatively rich bottomland of the James River, produced a milder, yet still dark leaf that soon became the European standard.
23 Answer is d) the loss of confidence at one bank quickly extended to the other banks. As A bank run is a situation that occurs when a large number of bank or other financial institution's customers withdraw their deposits simultaneously due to concerns about the bank's solvency. During 1930's at the time of great depression bank runs that affected several banks.
24 Answer is c) money multiplier is the money supply divided by the reseve ratio. This is because a money multiplier is one of various closely related ratios of commercial bank money to central bank money under a fractional-reserve banking system.
25 Answer is d) federal funds are the bank deposits at the federal reserves. As In the United States, federal funds are overnight borrowings between banks and other entities to maintain their bank reserves at the Federal Reserve. Banks keep reserves at Federal Reserve Banks to meet their reserve requirements and to clear financial transactions.
26 Answer is a) more the liquid asset higher will be the purchsing power as it is easily converted into cash without any loss. hence there will be more purchasing power.
27 Answer is a) opportunity cost . As the opportunity cost of a choice is the value of the best alternative forgone where, given limited resources, a choice needs to be made between several mutually exclusive alternatives. hence the opportunity cost is the cost in which interest earning on gives up to hold more liquid assets.
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