Write an essay on the importance of a sound banking system in developing countries
What will be an ideal response?
See for example the vivid example of Chile in 1981-1982 experience. Students should explain the phenomena of moral hazard as a part of their answer.
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The riskier the bond, the ________ the discount rate and the ________ the price of the bond.
A) lower; lower B) lower; higher C) higher; lower D) higher; higher
If economic profits are negative
A) accounting profits can be positive. B) accounting profits can be negative. C) the cost of capital is not being covered. D) all of these choices.
Suppose the demand for the Diane Playing Cards has fallen. Explain what will happen to the firm's demand for loanable funds
A landlord will supply her land for rental only if in equilibrium
a. she receives economic rent on the land. b. she is paid at least the opportunity cost of using the land herself. c. her land is marginal. d. her rate of return on her investment in the land is zero.