An efficient financial system
A) must disseminate information to lenders about the quality of financial claims issued.
B) provides minimal information about financial markets.
C) provides perfect information regarding investment opportunities to savers.
D) does not provide any information to borrowers.
A
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Munn v Illinois (1877) was particularly important with regard to government regulation because it
(a) upheld the traditional right of businesses to act freely without interference by government. (b) established the right of government to regulate any business that was deemed "clothed" in the public interest. (c) established the right of government to regulate any and all businesses wherever such regulation was deemed desirable to promote competition. (d) established the right of government at any level to regulate any business activity if such regulation was deemed desirable for any reason.
Tina withdraws $20,000 from her money market account to start up her own house cleaning business. Over that time, the account would have earned 3 percent interest. In order to properly account for all costs of her business, Tina must not forget:
A. the opportunity cost of $2,600. B. the opportunity cost of $600. C. the fixed cost of $20,600. D. the fixed cost of $20,600 and the opportunity cost of $600.
When a good is more broadly defined (for example, Starbucks Caramel Macchiato versus coffee),
a. it will have more available substitutes so demand will be more elastic. b. it will have more available substitutes so demand will be less elastic. c. it will have fewer available substitutes so demand will be more elastic. d. it will have fewer available substitutes so demand will be less elastic.
To say that government sometimes functions as a "transfer mechanism," means that government sometimes
A) ends up transferring goods to individuals in return for taxes paid. B) ends up transferring negative externalities into positive externalities. C) ends up taking from group X to give to group Y. D) transfers taxes into subsidies. E) none of the above