Question

12:037 final exam.pdf d wary of future downturns, and shift the supply curve for kanable funds to the left 23. Since the future holds more uncertainty over longer periods of time, lenders generally want a higher interest rate for loans over a longer period ba lower interest rate for loans over a longer period a higher interest rate for loans over a shorter period d. None of these is true 24. When a borrower fails to pay back a lon according to the agreed upon terms, it is called credit risk c default opportunity cost d. inflacion 25. The more liquid markets a the lower the interest rates, and the higher the amount of investment b the lower the interest rates, and the lower the amount of investment the higher the interest rates, and the higher the amount of investment d. the higher the interest rates and the lower the amount of investment 26. la eneral, financial assets that have amount of risk have a Misherhigher b isher: lower clower, higher d. None of these is true 27. In an economy without government or trade, it must be true that savings equal investment b. consumption equals savings plus investment c onsumption plus savings equal investment d consumption plus investiment qual national savings 28 Bartering is very efficient compared to using money slightly inefficient compared to using money 6. just as efficient as using money d extremely inefficient compared to using money 29. Hat money is: a any form of money that can be legally exchanged into a fixed amount of underlying commodity. b. money created by rule money used for the exchange of large commodities d. None of these is true 30. Banks create money in the conomy by: a loaning out part of each deposit, which will be redeposited by someone else b charging higher interest on loans than savings. charging higher interest on savings than loans d. Only the government can create money 31. The money multiplier is approximated as being equal to a one divided by the reserverat, b one divided by the federal funds demand deposits multiplied by the interest rate d. demand deposits multiplied by the reserverato must be 32 If the money multiplier is approximated to be 2. then the reserverat SO percent

Answer 1

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