Which of the following is not a reason for studying credit market frictions?
A) explaining features of financial crises.
B) explaining key elements of financial market behavior.
C) understanding why Ricardian equivalence may not work.
D) explaining why collateral does not matter.
D
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The study of development economics is to understand
A) the personality factors that lead people to become entrepreneurs. B) why most of the patents on record have been given to men rather than to women. C) why some countries are rich and others are poor. D) why some products are successful in the market as soon as they are developed, whereas others do not catch on for years.
When the economy is disturbed by a change in the output market
A) a fixed exchange rate has an advantage over a flexible rate. B) a floating exchange rate has an advantage over a fixed rate. C) a crawling peg exchange rate has an advantage over a flexible rate. D) a floating exchange rate has the same effect as fixed rate. E) a flexible exchange rate is not as effective as a fixed exchange rate.
When an investment project generates output that is valued more highly than the value of the resources required for its production,
a. undertaking the project will create wealth. b. it will generally be profitable to undertake the project if property rights are securely defined and enforced . c. entrepreneurs seeking profit will have little incentive to undertake such projects. d. both a and b are correct.
Which of the following will tend to make the deposit expansion multiplier a larger number?
A. A decrease in loans made by commercial banks B. An increase in loans made by commercial banks C. An increase in the prime interest rate D. An increase in the money supply E. A decrease in the required reserve ratio