Roles served by financial markets include the following, except:
A. sharing of risk.
B. pooling and communicating information.
C. eliminating risk.
D. providing liquidity.
Answer: C
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Economists argue that when the price of a textbook rises, students reduce their quantity demanded of textbooks. This cause-and-effect relationship holds only under conditions of
a. moderate price increases b. market flexibility c. complete information d. ceteris paribus e. consumer sovereignty
Which of the following is FALSE?
A. If social costs are greater than private costs, "too much" of a good is being produced. B. Pollution is a social cost. C. Private costs do not include external costs. D. Social costs do not include private costs.
When a foreign investor buys a bond issued in the United States
A) the balance on the capital account increases. B) the balance on the current account increases. C) the balance of trade increases. D) the balance on the financial account increases.
Countries tend to use the labor processes that ______.
a. they have had the longest b. take advantage of their most plentiful resources c. utilize their most expensive resources d. rely on their most scarce resources