The lower the cost of funds, the greater the amount of loanable funds demanded.
Answer the following statement true (T) or false (F)
True
The higher the expected return or the lower the cost of funds, the greater the amount of loanable funds demanded.
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Which of the following is not an advantage of risk pooling?
A) By insuring large groups as opposed to individuals, health insurance providers reduce adverse selection. B) It gives very sick people in the group the same access to health care and to pay the same premiums as healthy individuals. C) Individuals who are insured and therefore do not have to pay the full cost of health care services may be inclined to over-use those services. D) It is easier for an insurance company to estimate the average number of claims likely to be filed under a group policy than it is to predict the number of claims likely to be filed under an individual policy.
In an efficient market with rational expectations, the actual price of an asset
A) will equal its expected price. B) will often be below its expected price. C) will often be above its expected price. D) equals its expected price plus a random error term.
Safe Bank has an outside display which has the time and temperature that is always correct. This is an example of
A) an interference in the workings of the price system. B) a breakdown in communication between the bank and its customers. C) a negative externality. D) a positive externality.
Which of the following effects will not increase (i.e., shift to the right) the aggregate supply curve?
a. An increase in the average national price level. b. A decrease in the price of fuel. c. An appreciation of the domestic currency. d. All of these answers are correct. e. None of these answers is correct.