The risk that all loans will default at the same time is called:
A. liquid risk.
B. security risk.
C. systemic risk.
D. diversified risk.
Answer: C
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Under the monetary growth rule proposed by the monetarists, the money supply would grow each year at a constant rate equal to the long-run rate of growth of
A) employment. B) inflation. C) interest rates. D) real GDP.
Suppose two variables are directly related. If one variable rises, then the other variable:
a. also rises. b. falls. c. remains unchanged. d. reacts unpredictably.
If a major technological breakthrough occurs, then the:
a. investment demand curve will shift downward. b. investment demand curve will shift upward. c. consumption function will shift downward. d. consumption function will shift upward. e. economy will move to a new point along the existing investment demand curve.
Which of the following statements is false?
A) Domestic income is the total income earned by the people and businesses within a country's borders. B) National income is the total income earned by U.S. citizens and businesses, no matter where they reside or are located. C) Corporate profits is the largest component of national income. D) National income = compensation of employees + proprietors' income + corporate profits + rental income + net interest.