Financial intermediaries are important because
A. they increase costs for banks.
B. they employ large numbers of people.
C. they bring lenders and borrowers together in a way that lowers transaction costs.
D. they provide large funds to the stock market.
Answer: C
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Over time, a country's real GDP per capita typically
A) shrinks B) grows. C) increases and decreases randomly. D) remains stable.
Moral hazard results from ________ information and adverse selection results from ________ information
A) private; private B) private; public C) public; private D) public; public
Which of the following was not a major source of economic growth in the 1920s?
a. construction of residential housing b. production of consumer durables c. railroad construction d. automobile production
A bank has deposits of $100,000, reserves of $20,000, and loans of $80,000. If the desired reserve ratio is 10 percent, then its excess reserves are
A) 0. B) $8,000. C) $10,000. D) $2,000. E) $12,000.