The interest rate that banks charge other banks for overnight loans is the
A) discount rate. B) Treasury bill rate. C) prime rate. D) federal funds rate.
D
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What does it mean for a money market mutual fund to "break the buck"?
A) The value of its share declines below $1. B) It incurs losses on its investments. C) It increases its fees to more than 1% of net asset value. D) It is unable to meet the demand for withdrawals by investors.
In both Gamma and Delta average labor productivity is $40,000 per worker per year. The population of Gamma is 200,000 and the population of Delta is 400,000. Fifty percent of the population in each country is employed. Total output in Gamma is ________ and total output in Delta is ________.
A. $2. 4 billion; $4. 8 billion B. $4 billion; $8 billion C. $8 billion; $16 billion D. $100,000; $200,000
Diversification involves:
A. investing all your money in one company. B. buying only one kind of stock. C. buying only low-risk bonds. D. None of these statements is true.
Suppose that the City of Arcata, California, imposes rent control so that rents cannot exceed $500 per month on one bedroom rental units. Suppose that $500 had also been the equilibrium rental price in Arcata before a huge new apartment complex was built in the nearby town of McKinleyville, where rents are $400 per month. Which of the following is most likely to be true?
a. There will be a lasting surplus of rental housing in Arcata after the new apartment complex is built in McKinleyville. b. There will be a shortage of rental housing in Arcata at the rent-control price of $500. c. The equilibrium rental price in Arcata will fall below $500, and thus rent control will not affect the rental market in Arcata. d. The equilibrium price of $500 per month in Arcata will not change.