Saving is often discouraged by usury laws during inflationary periods because
a. nominal rates of interest are kept above real rates of interest.
b. nominal rates of interest are kept below inflation rates.
c. nominal rates of interest are kept above inflation rates.
d. real rates of interest are kept above inflation rates.
b
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Suppose the federal government wants to encourage businesses to increase investment spending. Which policy may be the most effective?
a. an increase in corporate income taxes b. an increase in real interest rates c. an increase in warnings of a coming recession d. an increase in tax deductions for investment spending
?Which of the following options could be used to eliminate a recessionary gap?
A. Decrease government spending B. ?Decrease consumption C. Decrease investment D. ?Decrease taxes
Which of the following statements about venture capital firms is FALSE?
A. Most start-up companies that acquire venture capital eventually turn out to be successes. B. Venture capital firms invest in high-risk, high-potential firms. C. Venture capital firms get most of their capital from pension funds, large university endowments, and other institutions that can take substantial risks with a small portion of their funds. D. Companies that acquire their funds from venture capital firms may initially have trouble acquiring capital from other channels.
Moral hazard and adverse selection are both examples of
a. the principal-agent problem. b. externalities in consumption. c. efficiency in markets. d. perfect information. e. asymmetric information.