Because handling charges are relatively fixed, the interest rate on a loan generally
A) increases with the size of the loan.
B) decreases with the size of the loan.
C) is constant regardless of the size of the loan.
D) is unrelated to the size of the loan.
Answer: B
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Malaysia differed from other East Asian countries after the crisis in its adoption of
a. government-owned banks b. investment insurance c. prison sentences for currency traders d. restrictions on capital movements e. all of the above
The nation of Aquilonia has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing incense, exporting steel, and neither importing nor exporting rugs. We can conclude that Aquilonia's new free-trade policy has
a. increased consumer surplus and producer surplus in the incense market. b. increased consumer surplus in the steel market and left producer surplus in the rug market unchanged. c. decreased consumer surplus in both the steel and rug markets. d. decreased consumer surplus in the steel market and increased total surplus in the incense market.