Explain what occurs in the capital market
What will be an ideal response?
The capital market is where households supply their savings to firms that demand funds in order to buy capital goods.
You might also like to view...
If there was a federal budget surplus it would make it possible to
A) decrease taxes in order to improve the equity and efficiency of the tax system. B) increase spending on priorities. C) reduce the national debt. D) any of the above.
Sefronia and Bella share an apartment and they are deciding whether or not to purchase a weekly housecleaning service. The value of the service to each of them is $50 and it costs $80 to hire a housecleaner
Suppose Bella is lazy and a spendthrift and Sefronia suspects that Bella will be willing to pay $80. What is Sefronia likely to do, given that she is as rational as any other person? A) She might claim that she is not willing to pay for a housecleaner, hoping that Bella would pay the entire $80. B) She will correctly rationalize that Bella's laziness and spendthrift ways are irrelevant to the decision at hand. C) She will come clean and tell Bella that since Bella is lazy and a spendthrift she should pay a bigger share of the $80. D) She might offer to do Bella's housecleaning chores if Bella would pay her $50.
Money has replaced the need to barter, which is:
A. a certain amount of purchasing power that it retains over time. B. something you can use to purchase goods and services. C. something you can directly offer, like any good or service, in exchange for some good or service you want. D. a standard unit of comparison.
An economist from which of the following schools of thought would most likely say - "An increase in government expenditure will only increase inflation, because the aggregate supply curve is vertical"?
a. Neoclassical economics b. Traditional classical economics c. New Keynesian economics d. Keynesian economics e. Marxist economics