The following is an example of risk aversion
a. those applying for a well-paid job tend to be the most qualified
b. more reckless drivers opt for cars with fewer safety devices
c. the contractor with the lowest bid for a is under-qualified
d. Initial Public Offerings (IPOs) seek investors when prospects look good
c
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Depository institution create liquidity when they
A) buy assets that are liquid. B) borrow short and lend long. C) have liabilities that are illiquid. D) borrow long and lend short.
Refer to Figure 5-4. What is the deadweight loss from producing at the market equilibrium?
A) area D B) area E C) area C D) area F
Car manufacturers who use robots to do certain jobs on the assembly line are trying to increase supply by
a. lowering input costs b. taking advantage of government regulation c. applying new technology d. increasing the number of producers
The dividend-discount model predicts that stock prices:
A. will be high when interest rates are high. B. should be high when dividends are high. C. should be high when dividends are low. D. will be higher when the growth rate of dividends is low.