Which of the following is not correct?
a. By saving a larger portion of its GDP, a country can raise its output per worker.
b. Savers supply their money to the financial system with the expectation that they will get it back with a return at a later date.
c. Financial intermediaries are the only type of financial institution.
d. The financial system helps match people's saving with other people's borrowing.
c
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While many analysts defended the actions taken by the Fed and the Treasury to respond to the financial crisis in 2008, others were critical of these actions. The critics were concerned that by not allowing large firms to fail
A) stockholders and bondholders of these firms were not allowed to receive the proceeds from the sale of assets that would have occurred if the firms had declared bankruptcy. B) there is an increased likelihood that other firms will engage in risky behavior in the future with the expectation that they will also not be allowed to fail. C) there will be less competition in the U.S. economy, which could led to higher prices for consumers. D) smaller firms will resent not receiving similar assistance.
Cartels usually succumb to divisive forces caused by
a. limited information. b. members cheating by giving secret discounts. c. entry by new rivals seeking profits. d. insufficient profits compared to independent operations.
Most of the government budget is mandatory spending through programs like Medicare and Social Security, and much of the rest is politically difficult to alter. Because of this:
A. the amount of spending is unlikely to be implemented as economists suggest. B. fiscal policy that involves raising taxes is more likely to be implemented than fiscal policy that involves borrowing money. C. most spending is geared to perform as an automatic stabilizer, so that Congress is in fact largely irrelevant when it comes to providing a fiscal response to a recession. D. fiscal policy is always undertaken only when there is a national crisis that motivates voters to seek change.
The Norwegian economy can be characterized by Equation 24.3.EQUATION 24.3:C = 100 + 0.8Yd G = 500T = 200I = 200Refer to Equation 24.3. At the equilibrium level of output in Norway, saving equals
A. 1,660. B. 850. C. 630. D. 500.