Financial intermediaries:
a) increase transaction costs.
b) increase information costs.
c) increase overall risk to savers in order to make more money.
d) allow a greater flow of funds between savers and investors.
Ans: d) allow a greater flow of funds between savers and investors.
You might also like to view...
Assume the Nozick rules are being followed in the economy so that the distribution of income is fair. What must be true for this to create an efficient allocation of resources?
A) All people are earning equal incomes. B) There are no public goods, monopolies, high transactions costs, or external costs and benefits. C) The costs of administering redistribution equals the benefits the poor receive. D) The government must redistribute income in a fashion that minimizes the "big tradeoff." E) The government must allocate resources using a command mechanism.
Which statement is true?
A. The highest paid professional athletes earn economic rent. B. Economic rent is paid on land, but not in the form of wages. C. Economic rent is earned mainly by the poor and the lower middle class. D. Economic rent is paid in proportion to the marginal revenue product of a resource.
The dollar price of a good relative to the average dollar price of all other goods and services is the good's:
A. nominal price B. equilibrium price C. market price D. real price
Refer to Figure 2-3. Carlos Vanya grows tomatoes and strawberries on his land. His land is equally suited for growing either fruit. Which of the graphs in Figure 2-3 represents his production possibilities frontier?
A) Graph A B) Graph B C) Graph C D) either Graph A or Graph B E) either Graph B or Graph C