Tranching makes it so that packages of reliable, low-risk mortgages could be sold to ______________, while higher-risk subprime mortgages could be sold to ___________.
A. more risk-averse investors; risk-loving investors
B. more risk-loving investors; risk-averse investors
C. national banks; local banks
D. local banks; the government
A. more risk-averse investors; risk-loving investors
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If increased capital usage reduces the firm's short-run demand for labor, then
a. labor is a regressive factor. b. labor and capital are complements in production. c. labor and capital are substitutes in production. d. labor is a Giffen factor.
The sum of the balances of the three accounts of the balance of payments (the current account, the capital and financial account, and the official settlements account) is
A) positive if there is a balance of trade surplus or negative if there is a balance of trade deficit. B) negative if there is a balance of trade surplus or positive if there is a balance of trade deficit. C) equal to zero. D) positive if there is a balance of trade surplus. E) negative if there is a balance of trade deficit.
The social surplus in a market is $50. If another economic agent enters the market such that the marginal cost he incurs is $10 and the marginal benefit he receives from the trade is $5, then which of the following statements is true?
A) The social surplus will remain the same. B) The social surplus will increase by $5. C) The social surplus will decrease by $5. D) The social surplus will increase by $10.
How do public goods differ from private goods?
What will be an ideal response?