How do firms raise external funds through indirect finance?
What will be an ideal response?
With indirect finance, funds flow from savers to borrowers through financial intermediaries such as banks.
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If the institutions in an economy change from being inclusive to extractive, the return-to-entrepreneurship schedule in the economy will:
A) become horizontal. B) shift rightward. C) become vertical. D) shift leftward.
List three ways government can reduce depletion of an endangered resource. Which of these ways requires the least amount of management, monitoring, and bureaucracy?
What will be an ideal response?
Monica grows coconuts and catches fish. Last year she harvested 1500 coconuts and 600 fish. She values one fish as having a worth of three coconuts
She gave Rachel 300 coconuts and 100 fish for helping her to harvest coconuts and catch fish, all of which were consumed by Rachel. In terms of fish, Monica's income would equal A) 700 fish. B) 900 fish. C) 1100 fish. D) 2700 fish.
Which of the following is not a consequence of deflation?
A. Deflation causes uncertainty about the future. B. The threat of deflation can make people reluctant to borrow for long periods. C. Deflation causes the real value of money to fall. D. Firms may be reluctant to undertake investments for fear that the prices at which they can sell their output will drop.