If the market interest rate is 5% and a bank advertises loans at 12%, the bank will receive
A) no applications.
B) applications from mostly low-risk borrowers.
C) applications from mostly high-risk borrowers.
D) a moral hazard.
C
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GDP is
A) a perfect measure of the value of production. B) an imperfect measure of the standard of living. C) the only factor that affects our standard of living. D) a perfect measure of the standard of living. E) a measure which includes the value of all newly produced goods and services.
The higher a security's price in the secondary market the ________ funds a firm can raise by selling securities in the ________ market
A) more; primary B) more; secondary C) less; primary D) less; secondary
If real GDP grows faster than nominal GDP, it is a sign that
A) inflation is negative. B) there is no inflation. C) there is inflation, but little. D) there is galloping inflation.
Explain why a government may select an inefficient allocation
What will be an ideal response?