Homework Answers
Answer is all of them. The latter 2 are information costs and are included within definition of transaction costs
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8) Transaction costs are: A) The costs of a trade or financial transaction. B) The costs...
Financial intermediaries a) Decrease asymmetric information problems in the financial system b) Increase transactions costs of...
Financial intermediaries a) Decrease asymmetric information problems in the financial system b) Increase transactions costs of financial activity. c) Make it more difficult for borrowers and savers to engage in risk sharing. d) All of the above.
The major purpose of a financial system is to a. trade stocks and bonds. b. regulate...
The major purpose of a financial system is to a. trade stocks and bonds. b. regulate banks. c. print money and checks d. match savers with borrowers
financial markets improve economic welfare because Financial markets improve economic welfare because: O A. they channel...
financial markets improve economic welfare because
Financial markets improve economic welfare because: O A. they channel funds from savers to investors O B. they allow consumers to time their purchases better O C. they eliminate the need for financial intermediaries D. both A and B are correct O E. all of the above are correct
1. The primary economic function of the financial system is to a. keep interest rates low....
1. The primary economic function of the financial system is to a. keep interest rates low. b. provide expert advice to savers and investors. c. match one person's consumption expenditures with another person's capital expenditures. d. match one person's saving with another person's investment. 2. A mutual fund a. is a financial institution that stands between savers and borrowers, b. is a financial intermediary, c. allows people with small amounts of money to diversify their holdings. d. All of the...
8) Financial markets allow for all but which one of the following? A) allow most participants...
8) Financial markets allow for all but which one of the following? A) allow most participants to routinely earn high returns with low risk B) price securities according to their riskiness C) shift consumption through time from higher-income periods to lower D) channel funds from lenders of funds to borrowers of funds
1) A well-developed financial system that is operating efficiently: I. Lowers search costs associated with lending...
1) A well-developed financial system that is operating efficiently: I. Lowers search costs associated with lending and borrowing II. Leads to higher economic growth than otherwise possible III. Makes funds available to all prospective borrowers Select one: A. I only B. I and II only C. I and III only D. II and III only E. I, II, and III 2) Which of the following financial intermediaries are able to create new checkable deposits when making loans to borrowers? I....
Are federal budget deficits related to trade deficits? A. Yes, but only if the quality of U.S. goods and services is deteriorating B. No. The budget deficit is entirely a domestic matter, while the...
Are federal budget deficits related to trade deficits? A. Yes, but only if the quality of U.S. goods and services is deteriorating B. No. The budget deficit is entirely a domestic matter, while the trade deficit only affects U.S. citizens who travel abroad. C. Yes. Higher deficit spending goes up results in more government borrowing, and foreign residents who lend funds to the U.S. government have fewer resources to spend U.S. export goods. D. Yes. If U.S. consumers buy too...
The benefits of a currency area include: a)Elimination of transaction costs due to different exchange rates...
The benefits of a currency area include: a)Elimination of transaction costs due to different exchange rates b) Intensified trade c) All answers are correct d) Elimination of exchange rate risk
the coupon payments on your bond will fall b. the market price of your bond will...
the coupon payments on your bond will fall b. the market price of your bond will rise the market price of your bond will fall d. the par value of your bond will rise. 5. Assets with greater risk Usually go unsold relative to those with lower risk a. b. are generally tax-free to compensate for the increased risk. Tend to have higher yields to compensate for the increased risk. c. Are avoided by rational people. d. Assets with greater...
8. (8 points) This machinery was acquired by trading in used machinery. Facts concerning the trade-in...
8. (8 points) This machinery was acquired
by trading in used machinery. Facts concerning the trade-in are as
follows. Cost of machinery traded (old machine) $100,000
Accumulated depreciation to date of sale (old machine) 40,000 Fair
value of machinery traded (old machine) 83,000 Cash received 12,000
Fair value of machinery acquired (new machine) 71,000 Record the
journal entry for the above nonmonetary asset exchange for the
following scenarios: a. The transaction has commercial substance.
b. The transaction lacks commercial substance...
financial markets improve economic welfare because
Financial markets improve economic welfare because: O A. they channel funds from savers to investors O B. they allow consumers to time their purchases better O C. they eliminate the need for financial intermediaries D. both A and B are correct O E. all of the above are correct
1. The primary economic function of the financial system is to a. keep interest rates low. b. provide expert advice to savers and investors. c. match one person's consumption expenditures with another person's capital expenditures. d. match one person's saving with another person's investment. 2. A mutual fund a. is a financial institution that stands between savers and borrowers, b. is a financial intermediary, c. allows people with small amounts of money to diversify their holdings. d. All of the...
8) Financial markets allow for all but which one of the following? A) allow most participants to routinely earn high returns with low risk B) price securities according to their riskiness C) shift consumption through time from higher-income periods to lower D) channel funds from lenders of funds to borrowers of funds
the coupon payments on your bond will fall b. the market price of your bond will rise the market price of your bond will fall d. the par value of your bond will rise. 5. Assets with greater risk Usually go unsold relative to those with lower risk a. b. are generally tax-free to compensate for the increased risk. Tend to have higher yields to compensate for the increased risk. c. Are avoided by rational people. d. Assets with greater...
8. (8 points) This machinery was acquired
by trading in used machinery. Facts concerning the trade-in are as
follows. Cost of machinery traded (old machine) $100,000
Accumulated depreciation to date of sale (old machine) 40,000 Fair
value of machinery traded (old machine) 83,000 Cash received 12,000
Fair value of machinery acquired (new machine) 71,000 Record the
journal entry for the above nonmonetary asset exchange for the
following scenarios: a. The transaction has commercial substance.
b. The transaction lacks commercial substance...
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