To reassure investors who were unwilling to buy mortgages in the secondary market, the U.S. Congress used two government sponsored enterprises, Fannie Mae and Freddie Mac, to stand between investors and banks that grant mortgages. Fannie Mae and Freddie
Mac
A) sell mortgages to investors and use the funds to purchase bonds from banks.
B) sell bonds to investors and use the funds to purchase mortgages from banks.
C) sell bonds to banks and use the funds to purchase mortgages from investors.
D) sell mortgages to banks and use the funds to purchase bonds from investors.
Answer: B
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A key resource is a material:
A) that is unlimited in supply. B) that is rationed by the government. C) that is available to monopolies only. D) that is essential for the production of a good.
A tax meant to counter the effect of a negative externality is called:
A. a Coase tax. B. a Pigovian tax. C. an external tax. D. a social benefit tax.
China's approach to market development has been
A. nonexistent. B. inefficient and intermittent. C. unrealistic and uneven. D. pragmatic and gradual.
Suppose you own a small business. Last month, your total revenue was $6,000. In addition, you paid: $1,000 in monthly rent for office space.$200 in monthly rent for equipment.$3,000 to your workers in wages for the month.$1,000 for the supplies you used that month.If you correctly determine that your economic profit last month was negative $200, then it must be true that:
A. your implicit costs are $200 per month. B. your implicit costs are $1,000 per month. C. you do not have any implicit costs. D. the rent you pay on your equipment is an implicit cost.