The risk of making a loan is
A) earning profits that are too high and cause higher taxes.
B) the risk that lender does not pay.
C) the risk that the borrower does not pay.
D) called "default risk" when taxes are not paid.
C
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Which of the following is a "free" good?
A) Elderly health care, which is covered by Medicare B) Health care for the poor, which is covered by Medicaid C) Higher education in Georgia, which is paid for by lottery revenue D) All of the above. E) None of the above.
The higher the expected rate of inflation,
A) the lower is the nominal rate of interest. B) the higher is the real rate of interest. C) the higher is the nominal rate of interest. D) the higher the real and nominal rates of interest.
Two variables are uncorrelated if:
A. they move in the same direction. B. they move in the opposite direction. C. their movements tend to be unrelated. D. one is simply a multiple of the other.
The consumer price index is a measure of
A) the lowest prices paid by urban consumers for a fixed basket of consumer goods and services. B) the commodity prices paid by urban consumers for a fixed basket of consumer goods and services. C) the average of the prices paid by urban consumers for a fixed basket of consumer goods and services. D) the consumer prices paid by average households for a fixed basket of goods and services. E) the average of the prices paid by rural consumers for a fixed basket of consumer goods and services.