Which of the following is likely to be a primary financial market transaction?
A. You cash the check your grandmother sent you for your birthday.
B. A city issues bonds to finance new road construction.
C. You call a broker and purchase bonds for your retirement fund.
D. A supermarket needs to borrow the funds for a second location and takes out a loan from a commercial bank to pay for it.
Answer: B
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________ recognizes that obtaining any scarce good involves a cost which affects behavior and goal setting
a. The Dagher Theory b. Fiduciary thinking c. The Nish-Byer Theory d. Economic thinking
Real GDP differs from nominal GDP in that nominal GDP measures
a. output adjusted for inflation. b. real output of goods and services. c. output of goods and services at current prices. d. real income adjusted for changes in the price level.
If the reserve ratio is 5 percent, then $500 of additional reserves can create up to
a. $10,500 of new money. b. $10,000 of new money. c. $9,500 of new money. d. $2,500 of new money.
Suppose the tax rate on interest income from saving were reduced
a. The income effect, but not the substitution effect, would tend to reduce private saving. b. The substitution effect, but not the income effect, would tend to reduce private saving. c. Both the income and substitution effect would tend to reduce private saving. d. Neither the income nor the substitution effect would tend to reduce private saving.