Securitization is the practice of:
A. packaging individual debts into a single uniform asset that can be easily bought and sold.
B. the government guaranteeing repayment of risky home loans made to individuals with lower credit.
C. borrowing based on expected future earnings.
D. backing a security with a riskless asset.
A. packaging individual debts into a single uniform asset that can be easily bought and sold.
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At the beginning of the year, your wealth is $10,000. During the year, you have an income of $90,000 and you spend $80,000 on consumption. You pay no taxes. Your wealth at the end of the year is
A) $20,000.00. B) $0. C) $90,000.00. D) $100,000.00.
A perfectly competitive firm's marginal revenue exceeds its marginal cost at its current output. To increase its profit, the firm will
A) lower its price. B) raise its price. C) decrease its output. D) increase its output.
Why would a firm pay efficiency wages?
What will be an ideal response?
If profits are reinvested in the corporation, then
A) payments made to bondholders will be less. B) there are fewer funds available to distribute to stockholders. C) the company will sell more bonds in order to pay dividends to stockholders. D) the high profits indicate that common stockholders will get larger dividends than normal.