A major reason for the existence of financial intermediaries is
A) transactions costs that would be incurred without their existence.
B) the fees charged by dealers and brokers in direct finance are so high.
C) the problem of symmetric information.
D) to assist borrowers in buying securities in financial markets.
A
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If the natural monopoly shown in the figure above is unregulated, then it will charge a price of
A) $2. B) $4. C) $5. D) $6.
Which of the following statements correctly characterizes the problem with comparing production outcomes that are stocks and flows?
A) Labor usage is always a flow, which makes it difficult to compare with stock inputs like capital. B) Most capital inputs are stocks, but the returns on these investments (profits) occur as a flow. C) Most capital inputs are flows, but economists treat these expenditures as stocks by using the opportunity or economic costs associated with these inputs. D) Business returns or profits may be equivalently viewed as stocks or flows, which makes it difficult to compare the returns with the input expenditures.
A simplified representation of a complicated situation is:
A. cutting corners. B. a model. C. useless without adding fine details. D. econometrics.
Economist John Maynard Keynes once said, "In the long run, we are all dead." Keynes was likely:
A. in favor of using fiscal policy. B. against the use of fiscal policy. C. in favor of allowing the economy to always correct itself. D. Economy never achieves its long run equilibrium.