Economists assume that rational people
A) never use all available information as they act to achieve their goals.
B) respond to economic incentives.
C) undertake activities that benefit others and hurt themselves.
D) only weigh the benefits and costs of the most desirable alternative actions.
B
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Stocks are riskier for buyers because there is no commitment to pay dividends.
Answer the following statement true (T) or false (F)
If there is a surplus in the market for loanable funds, the resulting change in the real interest rate
a. reduces both the quantity of loanable funds supplied and the quantity of loanable funds demanded. b. reduces the quantity of loanable funds supplied and raises the quantity of loanable funds demanded c. raises both the quantity of loanable funds supplied and the quantity of loanable funds demanded. d. raises the quantity of loanable funds supplied and reduces the quantity of loanable funds demanded.
In the spot market, the ________ is the difference between the bid and offer rates and is the trader's profit margin.
A) bid B) offer C) cross rate D) spread
If companies who took into account an externality want to supply more at any given price compared to the original supply, they must have addressed a:
A. network externality. B. social externality. C. positive externality. D. negative externality.