The discount rate is the interest rate
a. commercial banks charge their low-risk customers for a loan.
b. savings and loan associations pay for using savings deposit funds.
c. the U.S. Treasury pays individuals who buy Treasury bonds in denominations of $10,000 or more.
d. the Federal Reserve charges banking institutions for borrowing its funds.
D
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Which of the following is not true with respect to underwriting?
A) Announcements of successful underwritings are called tombstones. B) Often a number of investments banks band together in a syndicate to market a new issue. C) Underwritings of new issues take place on the floor of the New York Stock Exchange. D) The investment bank typically guarantees an issuer of securities a price on the new issue.
George's parents let him use the family car whenever he wants, but require that he pays for all gas he uses. George has been driving the car 100 miles per week
His parents want to limit how much he drives the family car, but don't want to impose a major burden on his finances. Mom's plan is to charge him a dollar for each ten miles he drives the car (per week), but to increase his allowance by $10. Dad thinks this plan will have no effect on his driving since he is going to get the money back at the end of the week. Who is right? Explain.
Which of the following is the most efficient method to reduce pollution emissions?
a. government pollution charges or taxes b. non-tradable emission standards that cap allowable pollution c. common law enforcement of property rights, when those rights are well-defined and transaction costs are low d. legislated regulations limiting the quantity of emissions allowed by each firm
Which of the following is an example of the wealth effect during a period of inflation?
A. A firm receives a fixed price for the services it sells while the price level is rising B. You hold money in a savings account that earns 5 percent interest while the price level doubles C. Your income stays constant while the price level doubles D. You pay for utilities that are becoming more expensive as the price level is rising