Lenders prefer to lend to firms with high net worth because
A) such firms are usually willing to pay higher interest rates.
B) the owners of such firms have more to lose if the firm defaults on a loan.
C) the government requires most bank loans to be made to such firms.
D) such firms usually are unable to raise funds directly through financial markets.
B
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People have a demand for liquidity because
A) liquidity increases one's options. B) the rate of interest is positive. C) they have confidence in their own future earning power. D) they prefer present goods to future goods.
The primary cause of diseconomies of scale is scarcity of machinery and capital
a. True b. False Indicate whether the statement is true or false
What is the difference between positive and normative economics? How can knowledge of positive economics be useful in normative economics?
Which of the following would be classified as consumption spending?
a. A family's purchase of a new home b. A family's purchase of a used car c. A family's payment for a child's hospitalization d. A family's purchase of Microsoft stock e. A family's purchase of a swing set for their home day-care business