Why do financial intermediaries aid in the efficient operation of the economy?
a. Without them it would be difficult for small savers to lend to large borrowers.
b. They lend funds to businesses at a zero interest rate.
c. They print currency.
d. They regulate the money supply.
e. They engage in open market operations.
A
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According to economists, national defense can be supported through taxation because
A) national security generates no benefits for which any one would be willing to pay. B) people are insufficiently patriotic. C) taxation makes everyone pay in proportion to the benefits they receive. D) the people who refuse to pay the cost cannot easily be excluded from the benefits. E) we must choose between coercion through taxation and coercion through a draft.
"LIBID" is the rate at which U.S. banks
A) lend to their best customers. B) borrow Eurodollar market. C) lend in the Eurodollar market. D) borrow in the jumbo CD market.
Gordon characterizes Modigliani as a prominent activist yet several implications of his life cycle hypothesis support the non-activists. One of these implications is
A) transitory increases in income associated with the business cycle are not expected to last a lifetime so current consumption is relatively stable. B) permanent increases in income associated with the business cycle are not expected to last a lifetime so current consumption is relatively stable. C) transitory increases in income associated with the business cycle are not expected to last a lifetime so current consumption is relatively unstable. D) transitory increases in income associated with the business cycle are to last a lifetime so current consumption is relatively stable.
When a market clearing price is determined
A) the exchange between buyers and sellers is voluntary. B) the exchange between buyers and sellers is directed by outside factors such as the government. C) the exchange between buyers and sellers benefits only the buyers. D) the exchange between buyers and sellers benefits only the sellers.