Decentralized market-based financial systems improve the allocation of saving by:
A. eliminating the need for commercial banks or other financial intermediaries.
B. matching net capital inflows to net capital outflows.
C. ensuring capital gains exceed dividend payments.
D. providing information and risk-sharing services.
Answer: D
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A preannounced contractionary money policy is more likely to create unemployment when people have rational, rather than adaptive, expectations
a. True b. False Indicate whether the statement is true or false
The financial crisis of 2007-2008 illustrated how important the integration of international financial markets could be in contributing to the spread of financial problems from one country to another. What solution is cited to curb the spread of financial problems from one country to another?
a. Better regulation of financial institutions to ensure prudent risk taking b. Lowering the fiscal budget c. Reducing international investment d. Paying off debts from the Federal Reserve e. Mitigating lack of government transparency
If a firm manager has a base salary of $50,000 and also gets 2 percent of all profits, how much will his/her income be if revenues are $8,000,000 and profits are $2,000,000?
A. $90,000 B. $210,000 C. $250,000 D. $150,000
Assume a market price gets set artificially high-that is, it gets set above the equilibrium price. This change means:
A. Every consumer loses surplus, and it all gets transferred to producers. B. Some consumers drop out of the market, and those left lose some surplus. C. Every producer gains surplus, due to the higher price now being charged. D. None of these is true.