Risk premiums do all of the following except
A. Help explain why banks charge different customers different interest rates.
B. Allocate limited resources only to the safest investors.
C. Compensate people who finance risky ventures.
D. Are the difference in the rates of return on risky and safe investments.
Answer: B
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With collective action problems, individual trade-offs are different than the trade-offs for society as a whole
Indicate whether the statement is true or false
Seignorage is the revenue a government raises by
A) taxation. B) printing money. C) borrowing money. D) charging fees for services.
To examine a real-world issue, economists look at the real-world results to see how they differ from those of a free market
a. True b. False Indicate whether the statement is true or false
Which of the following is true? a. In equilibrium, with only two countries, the excess demand for loanable funds in one country will equal the excess supply of loanable funds in the other. b. Countries with net capital inflows tend to be few or no capital outflows
c. Capital flows will tend to decrease real interest rates in countries with a capital inflow. d. Both a. and c. are correct.