A bank allows us to diversify risk because it has a:
A. big pool of borrowers and savers, so the risk of repayment is spread among many.
B. small amount of borrowers, but many savers, so it can combine savings to make larger loans.
C. small amount of borrowers and savers, so it can connect the optimal saver to the best-matched borrower.
D. big pool of borrowers, but not many savers, so it can choose the riskiest person to borrow from.
A. big pool of borrowers and savers, so the risk of repayment is spread among many.
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Which of the following statements about positive economic analysis is true?
A) There is much less disagreement among economists over normative economic analysis than over positive economic analysis. B) Positive analysis uses an economic model to estimate the costs and benefits of different course of actions. C) Unlike positive economic analysis, normative economic analysis can be tested. D) There is much more disagreement among economists over positive economic analysis than over normative economic analysis.
If a market is contestable, then
a. long-run economic profits are minimal due to inefficiency. b. long-run economic profits are zero. c. short-run and long-run economic profits are zero. d. positive economic profits are maximized due to the efficient production spurred by the threat of entry.
Who among the following is a free rider?
a. Ernie listens to National Public Radio, but does not contribute to any fundraising efforts. b. Bert takes the commuter rail to work, but he purchases the discounted monthly passes rather than buying tickets each day. c. Grover sends his 5 children to a private school rather than to the public school in his neighborhood. d. Oscar goes to Elmo's house to watch a football game on the local television channel.
Common property
A. is owned by everyone. B. is owned by no one. C. Neither A nor B are correct. D. Both A and B are correct.