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HW1 Answer KEY

HW1 Answer KEY - If for example banks specialize in...

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NAME: ________________________________ EC370 – Winter 2009 HW1 Answer Sheet - KEY Write your answers to the multiple choice questions in the appropriate space using CAPITAL LETTERS. 1) B 6) C 11) B 16) C 21) B 2) C 7) B 12) A 17) D 22) C 3) A 8) B 13) A 18) B 23) A 4) D 9) B 14) D 19) A 24) C 5) C 10) A 15) A 20) B 25) B SA Questions 26) Chpt. 1, #11 Higher stock prices positively influence consumer wealth. As such, they will be more likely to increase spending 27) Chpt. 2, #12 True. If there aren’t information or transaction costs, people can finance their investment projects, etc at no cost. This would obviate the need for financial intermediaries. (There is more than one right answer here depending on interpretation.
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Unformatted text preview: If, for example, banks specialize in monitoring, there would still be a role for intermediation (but that assumes moral hazard isn’t an information cost which, ultimately, it is). The following questions refer to the Excel Assignment in the HW1 folder 28) Examine the series you created. Since the Economy began recovering in earnest from the last recession (2002-ish), which group of Americans has seen its financial position improve relative to the other – homeowners or renters? RENTERS were better off in terms of financial obligations as a percent of disposable income. 29) PASTE YOUR EXCEL GRAPH IN THIS SPACE: Rent-Home 5 10 15 20 80q1 82q2 84q3 86q4 89q1 91q2 93q3 95q4 98q1 00q2 02q3 04q4 07q1 Date % Rent-Home...
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