A risk premium compensates people who invest in risky ventures that succeed.
Answer the following statement true (T) or false (F)
True
Risk premiums compensate people who finance risky ventures and also help explain why banks charge different customers different interest rates.
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The value of the price elasticity of supply depends primarily on how quickly firms can acquire inputs to increase quantity supplied when price increases
Indicate whether the statement is true or false
Frictional unemployment is a sign of a healthy economy because
A. workers become more productive after taking vacations. B. economic growth remains steady. C. workers seek labor where they can provide the most value to their respective employer. D. wages fall, which forces workers to compete.
Whenever a buyer and a seller agree to trade
A) the agreement is made based on absolute advantage. B) they must have identical opportunity costs in producing their respective products. C) one party will always be worse off. D) both must believe they will be made better off.
Some people prefer more risky projects than less risky projects. But some people prefer less risky projects to those that are more risky. What explains this behavior?
What will be an ideal response?