All other things unchanged, higher saving rates contribute to higher rates of capital formation.
a. true
b. false
Ans: a. true
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Ms. Lane borrowed $1,000 from her bank for one year at an interest rate of 10 percent. During that year, the price level went up by 15 percent. Which of the following statements is correct?
a. Ms. Lane will repay the bank fewer dollars than she initially borrowed. b. Ms. Lane's repayment will give the bank less purchasing power than it originally loaned her. c. Ms. Lane's repayment will give the bank greater purchasing power than it originally loaned her. d. Ms. Lane's repayment will give the bank the same purchasing power that it originally loaned her.
A country that has a capital account deficit:
A. is a net buyer of assets. B. is importing more goods and services than it exports. C. is a net seller of assets. D. also has a current account deficit.
Assume that you own a lake house. Unfortunately your job will require that you spend the summer on the road and you won't be able to enjoy it. You decide that you will rent it out for the summer while you are working
The mortgage payment on the lake house is $1000 per month and the upkeep and maintenance if it is occupied is $200 month but zero if it is not rented. What is the minimum rent that you would be willing to receive and why? What information is irrelevant in your decision? Explain.
Because of the presence of asymmetric information problems in credit markets, an expansionary monetary policy causes a ________ in net worth, which ________ the adverse selection problem, thereby ________ increased lending to finance investment
spending. A) decline; increases; encouraging B) rise; increases; discouraging C) rise; reduces; encouraging D) decline; reduces; discouraging