In making an investment decision, a business firm is most interested in the:
A. nominal interest rate.
B. real interest rate.
C. nominal interest rate minus the real interest rate.
D. the future supply of loanable funds.
Answer: B
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Bonds with no default risk are called
A) flower bonds. B) no-risk bonds. C) default-free bonds. D) zero-risk bonds.
Which of the following is NOT a disadvantage of controls on capital outflows?
A) The controls may lead to excessive risk taking by the domestic banks. B) They are seldom effective during a crisis. C) Capital flight may increase after they are put in place. D) Controls often lead to an increase in government corruption.
Which of the following is a possible reason for governments to regulate business operations?
a. To increase monopoly profits b. To reduce the amount of information consumers have about a product c. To increase negative externalities d. To promote competitive behavior e. To decrease positive externalities
which is correct?
Federal Reserve notes are an asset to the Federal Reserve. Gold is a liability to the Federal Reserve. Foreign exchange is an asset to the Federal Reserve.