Which of the following is not a benefit to lenders of financial intermediation?
a. Higher liquidity than the direct market.
b. Lower credit risks than the direct market.
c. Lower liquidity risk than the direct market.
d. Lower market risk than the direct market.
e. All the above are benefits.
.E
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
When road construction crews work at less than 100 percent of effort during their work days in order to create overtime work for themselves, they are creating what economists describe as a
a. moral hazard problem b. work dependency problem c. principal-agent problem d. efficiency wage problem e. employment-management problem
The typical firm in perfect competition is
A. a fast food restaurant chain. B. an electrical power company. C. a farm. D. an airline.
A charity that used to arrange matching charitable contributions, but no longer does, is likely to ________ the free-rider problem and lead to a ________ level of contribution to the public good.
A. reduce; smaller B. reduce; larger C. increase; smaller D. increase; larger