You agree to lend ________ to a friend for a year at an annual interest rate of 10%. At the end of the year your friend pays you $500 in interest.
A. $50
B. $550
C. $5,000
D. $5,500
Answer: C
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Which of the following is a distinctive feature of a credit-driven asset-price bubble?
A) asset-price increases that are "justified" by projections of future value B) a weakening of lending standards C) an increase in the number and variety of market participants D) The affected assets are financial stocks or bonds issued by companies in the financial sector.
Sally lost her job when her company went out of business because of a recession. This is an example of:
A. frictional unemployment. B. structural unemployment. C. cyclical unemployment. D. technological unemployment.
What determines the revenue flows received by businesses?
A) an agency of the Federal government B) their ownership of factors of production, how much they sell in the factor markets, and the prices received when sold C) what they pay the factors of production they employ D) what they choose to produce, how much is sold, and the price received when sold E) financial institutions such as banks
The majority of small businesses
A) are privately owned. B) are managed by professional managers. C) raise funds in financial markets. D) are self-financing.