The United Bank of Glassen only lent money to a limited number of big business houses. After a financial crisis, the bank went out of business. Which of the following reasons could have contributed to the collapse of this bank?
a. Their decision not to lend funds to the Federal Reserve
b. Their decision not to diversify their asset portfolio
c. Their decision to extend loans to a diversified pool of borrowers
d. Their decision to extend mainly short-term loans
e. Their decision to unnecessarily scrutinize each borrower's details
b
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Capital is the
A. flow of new equipment that a firm acquires over the course of a year. B. amount of increase in a firm’s equipment over a year. C. amount of money that a firm has on hand at a given time. D. stock of plant, equipment, and other productive resources held by a firm.
Suppose there are 10 million part-time workers and 90 million full-time workers in an economy. Five million of the part-time workers switch to full-time work. As a result, the
A. official unemployment rate will fall. B. size of the labor force will increase. C. official unemployment rate will rise. D. official unemployment rate will remain unchanged.
Kathy and Amy paint pictures and do caricatures to sell to tourists. In one day, Kathy can either paint two pictures or do four caricatures. In one day, Amy can either paint three pictures or do three caricatures
For both Kathy and Amy, what is the opportunity cost of painting one picture? Who has the comparative advantage in painting pictures and who has the comparative advantage in doing caricatures? How might they be able to increase their total output?
Is an efficient market allocation fair? Explain