The "shadow banking system" refers to:
A. the provision of credit through the underground economy when the financial crisis of 2007
and 2008 occurred.
B. the process by which securities exchanges provide credit for personal and business needs
apart from traditional bank lending.
C. the series of illegal financial transactions that precipitated the financial crisis of 2007 and
2008.
D. mortgage loans made to homebuyers who are poor credit risks.
B. the process by which securities exchanges provide credit for personal and business needs
apart from traditional bank lending.
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If the Fed buys $100,000 in U.S. government securities from a commercial bank, the bank now has an additional $100,000 of
A) total assets. B) excess reserves. C) actual reserves. D) net worth.
A positive externality exists and government wants to apply a per-unit subsidy in order to bring about the socially optimal output. Under what condition will the solution (of the subsidy) be worse than the problem (the market failure)?
A. Under the condition that the subsidy is greater than the marginal external benefit (associated with the positive externality). B. Under the condition that the post-subsidy output is not farther away from the socially optimal output than the pre-subsidy output is from the socially optimal output. C. Under the condition that the post-subsidy output is farther away from the socially optimal output than the pre-subsidy output is from the socially optimal output. D. Under the condition that the subsidy is less than the marginal external benefit (associated with the positive externality). E. none of the above
An individual owns a $100,000 home. She determines that her chances of suffering a fire in any given year to be 1/1000 (0.001). She correctly calculates her expected loss in any year to be $100. Explain why this really isn't a good way to measure her potential for loss.
What will be an ideal response?
Which of the following products has the most elastic demand?
A. Coca Cola in 12 oz. cans B. all cola drinks C. all carbonated beverages D. all beverages