Suppose the demand for the Diane Playing Cards has fallen. Explain what will happen to the firm's demand for loanable funds
A decrease in demand for cards decreases the price of the cards, which leads to a lower MRP of capital for
the firm, since MRP = MPP × P. As a result, the firms' demand for loanable funds will fall (shift to the
left) because the demand for loanable funds is the marginal revenue product of capital.
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Without usury laws, banks will
A) charge very high interest rates to all borrowers. B) charge higher interest rates to riskier borrowers than to safer borrowers. C) charge very low interest rates to all borrowers. D) face no demand for loans.
Diminishing marginal product of labor occurs when: a. adding another unit of labor increases output, but not by as large a margin as the previous unit of labor employed. b. the average product of labor begins to rise
c. adding another unit of labor increases output by a larger margin than the last unit of labor employed. d. all inputs are varied simultaneously in the same proportion.
6%-8% economic growth rate is 2% what is nominal rate
What will be an ideal response?
In comparing the traditional way of structuring mortgages and the newer structure of providing mortgages that securitized them and insured those securities with credit-default swaps, it is clear that the ________ structure allowed more people to afford homes and that the ________ structure was safer to the health of the overall economy.
A. traditional; newer B. newer; newer C. newer; traditional D. traditional; traditional