Limit commitment occurs when
A) collateral is required to get a loan.
B) one cannot borrow as much as necessary to conduct business.
C) one cannot be forced to repay a loan.
D) the bank can sell your loan to another bank.
C
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Answer the following statements true (T) or false (F)
1. Total annual production in the United States is in excess of $14 trillion. 2. The ability to produce a good or service using fewer resources than other producers use is known as comparative advantage. 3. Japan has a low standard of living because of its shortage of resources. 4. Technological development can be applied to the improvement of human capital as well as physical capital.
A financial intermediary is
A. a firm that specializes in borrowing funds from savers and lending those funds to investors. B. publicly owned but managed in the public interest. C. a firm that regulates the money supply. D. All of the choices are true of a financial intermediary.
Refer to Figure 10.3. If full-employment GDP is $500 billion and the economy is on AD0,
A. An inflationary gap exists, and AD must decrease by less than $100 billion to eliminate it. B. A recessionary gap exists, and AD must increase by more than $100 billion to eliminate it. C. An inflationary gap exists, and AD must decrease by more than $100 billion to eliminate it. D. An inflationary gap exists, and AD must increase by $100 billion to eliminate it.
An inflationary expenditure gap is the amount by which:
A. equilibrium GDP falls short of the full-employment GDP. B. aggregate expenditures exceed any given level of GDP. C. saving exceeds investment at the full-employment GDP. D. aggregate expenditures exceed the full-employment level of GDP.