Financial intermediaries
a. harm both borrowers and lenders because they pay lenders a lower rate of interest than they charge to borrowers
b. specialize in assembling loanable funds from households and firms, and channeling those funds to other households, firms, and government agencies
c. are all depository institutions
d. increase the risk of lending and borrowing because a financial intermediary has nothing to lose from such transactions
e. reduce efficiency because they add an extra step to many financial transactions
B
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The Lorenz curve shows the:
a. growth of income over time compared to potential growth of income. b. relative percentage of income going to each of the resources. c. demand for unskilled versus unskilled labor. d. actual cumulative percentage of income received compared to a perfectly equal cumulative percentages of income.
The Fed
a. issues currency but has little control over U.S. monetary policy b. serves as the central bank for the United States c. levies a variety of taxes—from sales tax to direct income tax—to control the money supply d. ensures commercial bank profitability to stabilize the money economy e. bails out savings and loans on a regular basis
The rate of output that maximizes profit for a monopolist can be found where ________
a. average revenue equals marginal cost b. price equals marginal cost c. marginal revenue equals marginal cost d. total revenue is maximized
Can a monopolistically competitive firm producing a good with lots of very close substitutes earn large positive profits in the long run?
What will be an ideal response?