At higher income levels the interest rate must be lower to achieve money market equilibrium
Indicate whether the statement is true or false
FALSE
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Which of the following is not a reason for studying credit market frictions?
A) explaining features of financial crises. B) explaining key elements of financial market behavior. C) understanding why Ricardian equivalence may not work. D) explaining why collateral does not matter.
The negative impact of government debt on the economy is mitigated by ________
A) the impact of the debt on national saving B) government spending on schools and highways C) the interest rate effects of government budget deficits D) the phenomenon of crowding-out
The maximum percentage of a stock's value that can be used as collateral to borrow from a bank is known as the
a. discount rate b. federal funds rate c. reserve requirement d. margin requirement e. ancillary suasion
A difference in wages between a highly-educated worker and a less-educated worker
a. may be due to a difference in the amounts of human capital between the workers. b. may be a signal that the market is indifferent to a worker's level of human capital. c. is considered unfair by economists. d. is considered unfair by everyone.