Financial disintermediation occurs when:
a. Individuals withdraw funds from financial intermediaries and invest them elsewhere.
b. Businesses no longer issue stock.
c. Individuals no longer trade securities in the secondary market.
d. None of the above.
e. Businesses no longer borrow directly in the bond market.
.A
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Economists assume that business firms attempt to maximize their profits.
Answer the following statement true (T) or false (F)
If a consumer's budget line for food (F) and shelter (S) is represented as F = 250 - 5S, we know that
A) the consumer's income is 250. B) the price of shelter is 5. C) the price of shelter is 5 times the price of food. D) All of the above.
Which of the following would be a legitimate government activity in the U.S. economy?
A. The regulation of water pollution. B. The enactment of antitrust laws to protect consumers. C. Enforcing child labor laws. D. All of the choices are correct.
Which statement best explains why growth in China has been so rapid recently?
A. China began with very little capital, so its marginal product of capital was very low. B. China began with very high capital, so its marginal product of capital was very low. C. China began with very high capital, so its marginal product of capital was very high. D. China began with very little capital, so its marginal product of capital was very high.