What is the main purpose of an interest payment? What major factors affect interest rates?
What will be an ideal response?
Interest is the price paid by debtors to creditors for the use of loanable funds or financial capital. It represents the cost of obtaining credit and it compensates the creditors for their loss of current command over resources. Interest rates are affected by such factors as the length of loan, risk of nonrepayment of the loan and handling changes.
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The potential money multiplier gives us
A) the maximum potential change in the money supply due to a change in reserves. B) the growth in real national income when the money supply increases. C) the maximum potential change in the money supply due to a change in income. D) the growth in the money supply when income increases.
Which of the following is a factor that is relevant to country risk analysis?
A) political uncertainty B) external debt C) economic growth D) all of the above.
Which of the following is known to occur when the consumer equilibrium is achieved for someone at a carnival?
a. He has ample money in his carnival budget for additional rides. b. The marginal utility of the last ride he took on the roller coaster, a $7 ride, is equal to the marginal utility of the last ride he took on the hammerhead, a $3 ride. c. The marginal utility per dollar spent on the last roller coaster ride he took is equal to the marginal utility per dollar spent on the last hammerhead ride he took. d. He continued to ride the roller coaster until his marginal utility was driven down to zero, and then he switched to the hammerhead and rode that until he became sick to his stomach. Thus he had to leave the carnival before spending all his budget, and missed seeing the man shot out of the cannon.
The more diversification savers have the:
A. more willing they are to save money, and the more economic growth can occur. B. more willing they are to save money, and the less economic growth can occur. C. less willing they are to save money, and the less economic growth can occur. D. less willing they are to save money, and the more economic growth can occur.