Which of the following is NOT an example of transactions costs?
A) high interest rates
B) lawyers' fees
C) brokerage commissions
D) minimum investment requirements
A
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Suppose that there is concern about the stability of the global financial system causing a flight to the safety of U.S. government bonds. Which of the following is NOT a likely consequence?
A) higher price of U.S. government bonds B) lower interest rate on U.S. government bonds C) increased demand for U.S. government bonds D) reduced supply of U.S. government bonds
The expected effect of the Bush tax cuts would be a(n)
a. lower real interest rate. b. exchange rate depreciation. c. increased current account deficit. d. All of the above are correct.
Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real exchange rate and monetary base in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium. Assume the nominal exchange rate
is stated as: (Domestic currency per foreign currency). a. The real exchange rate rises and monetary base rises. b. The real exchange rate rises and monetary base falls. c. The real exchange rate and monetary base fall. d. The real exchange rate and monetary base remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
When a competitive market achieves allocative efficiency, it implies that:
A. The marginal benefit of having the product is greater than the marginal cost B. The buyers are getting the maximum consumer surplus from the product C. The combined consumer and producer surplus is maximized D. The quantity demanded is lower than the quantity supplied