If the credit market is close to being a competitive market, an interest rate ceiling imposed by usury laws will bring misallocations of resources
a. True
b. False
Indicate whether the statement is true or false
True
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Complementary goods are goods people consume together, such as peanut butter and jelly. If the price of peanut butter falls, we predict
A) the demand for peanut butter would increase. B) the demand for jelly would increase. C) the demand for peanut butter would decrease. D) the demand for jelly would decrease.
Unregulated monopolies can often make an economic profit in the long run because
A) they receive government subsidies. B) they have high costs. C) barriers to entry prevent competing firms from entering the market. D) the risks of running a monopoly are high.
The amount of foreign aid in proportion to developed countries' GNP has
(a) increased over time. (b) remained fairly stable over time. (c) decreased over time. (d) fluctuated widely but has shown no clear trend.
If a bond pays a fixed return of $500 a year and the current interest rate has risen from 5 percent to 10 percent, then the bond price must have:
a. risen from $25 to $50. b. fallen from $50 to $25. c. risen from $5,000 to $10,000. d. fallen from $10,000 to $5,000. e. risen from $1,000 to $5,000.