PACh1-4 - Econ 520 (Spring 2007) Answers to Problems for...

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Answers to Problems for Chapters 1-4 Masao Ogaki CHAPTER 2 1. Multiple-Choice Problems 1 A; 2 F; 3 B; 4 C 2. Short Answer/Essay Problems costs are higher per dollar of &nancial investment, and investment spend- investment spending would be lower. (2) Transactions costs and information costs. Examples for transactions costs include brokerage commissions and costs to hire lawyers to draw up loan con- tracts. Information costs include costs to collect information and to analyze information about borrowers. CHAPTER 3 1. Multiple-Choice Problems 1 B ; 2 C ; 3 C ; 4 C 2. Short Answer/Essay Problems 1. True. In monetary transactions, there are timing di/erences between a transaction to sell goods and services and a transaction to buy goods and services. Therefore, the medium of exchange must have a store of value function. 1
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This note was uploaded on 07/17/2008 for the course ECON 520 taught by Professor Ogaki during the Spring '07 term at Ohio State.

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PACh1-4 - Econ 520 (Spring 2007) Answers to Problems for...

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