Which of the following concerns were raised as a result of record low interest rates in 2012?
A) high perceived risk of default
B) high interest rate risk
C) corporations facing a lack of demand for bonds
D) high risk premiums on investment-grade corporate bonds
B
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Moe has a big exam tomorrow. He considered studying this evening, but decided to hang out with Curly instead. If neither activity involves any explicit costs, and Moe always chooses rationally, it must be true that:
A. Moe gets less benefit from spending time with Curly than from studying. B. Moe gets more benefit from spending time with Curly than from studying. C. the opportunity cost of studying is greater than the value Moe gets from spending time with Curly. D. the opportunity cost of studying is less than the value Moe gets from spending time with Curly.
Exhibit 8-18 A typical firm in a perfectly competitive market
As shown in Exhibit 8-18, the perfectly competitive firm is in long-run equilibrium at a price of:
A. $100. B. $200. C. $300. D. $400.
A decrease in "financial frictions" is associated with ________
A) a decrease in the credit spread B) more efficient functioning of financial markets C) reduced real cost of borrowing for businesses D) an increase in planned investment spending E) all of the above
An externality is defined as
a. an opportunity cost that is not considered, which causes inefficiency. b. a social cost that affects parties external to a transaction. c. a transaction which imposes a loss on one of the parties involved. d. a "cost of doing business" that cannot be allocated to any particular good. e. the increase in cost associated with increased production.