Author Question: Which of the following is true of banks? a. Banks reduce the opportunity cost of holding idle cash. ... (Read 14 times)

washai · **on:** Jun 30, 2018

Which of the following is true of banks?
a. Banks reduce the opportunity cost of holding idle cash.
b. Banks act as intermediaries between the government and private investors.
c. Banks can reduce risk by lending to rich borrowers.
d. Banks reduce the transaction costs of borrowing and lending money.
e. Banks can reduce risks by extending more loans.

Question 2

An increase in net wealth will:
a. increase consumption and saving at each level of income.
b. increase saving and decrease consumption at each level of income.
c. decrease consumption and saving at each level of income.
d. increase consumption and decrease saving at each level of income.
e. have no effect on consumption because consumption is a function of income.