The possibility of not getting paid back on a loan is known as
A. financial intermediation.
B. the risk of default.
C. deposit risk.
D. arbitrage.
Answer: B
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Suppose the nominal interest rate is 15% and the rate of inflation is 3%. The real interest rate is therefore
A) 3%. B) 5%. C) 12%. D) 18%.
In a closed economy, private saving, , is equal to
A) I - (G - T). B) I + (G - T). C) I + (G + T). D) I - (G + T). E) I + (G - T) + C.
Unit elastic demand occurs when
a. a one-unit increase in price leads to a one-unit decrease in quantity demanded b. a 1% increase in price leads to a one-unit decrease in quantity demanded c. price elasticity of demand is positive d. price elasticity of demand is exactly zero e. price elasticity of demand is exactly -1
An example of an opportunity cost is the time you forgo to eat a "free lunch."
a. True b. False Indicate whether the statement is true or false