One reason why financial intermediaries are beneficial is that
a. they can predict the pattern of the outflow of funds
b. they earn a profit
c. there are a variety of financial intermediaries
d. they reduce the risk to depositors by spreading loans among different borrowers
e. they charge high interest rates on funds they lend to depositors
D
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Torrie is thinking of starting up a small business selling hand-painted wine glasses. She is considering setting up her business as a sole proprietorship. What is one advantage to Torrie of setting up her business as a sole proprietorship?
A) As a sole proprietor, Torrie would have the ability to share risk with shareholders. B) As a sole proprietor, Torrie would face limited liability. C) As a sole proprietor, Torrie would have both ownership and control over the business. D) All of the above would be advantages of setting up her business as a sole proprietorship.
Karl can produce either 10 tons of oranges or 5 tons of apples in a year, while Adam can produce either 5 tons of oranges or 10 tons of apples. Which of the following is true? a. Adam has an absolute advantage in oranges and a comparative advantage in apples. b. Karl has an absolute advantage in oranges and a comparative advantage in oranges. c. Karl has an absolute advantage in both apples
and oranges. d. Karl has an absolute advantage and a comparative advantage in apples.
When money is used to buy a computer, it is functioning as a
A) unit of account. B) store of value. C) medium of exchange. D) none of the above
If the market price rises above $6.30, the firm will earn:
a. positive economic profits in the short run. b. zero economic profits in the short run. c. negative economic profits and shut down. d. negative economic profits in the short run but remain in business.