Which of the following is not a benefit to lenders/investors of financial intermediation?
a. Lower transaction costs than the direct market.
b. Lower risks than the direct market.
c. More diversification than the direct market.
d. More convenient than the direct market.
e. Higher yield than the direct market.
.E
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The tax multiplier is the
A) magnification effect of a change in taxes on aggregate supply. B) magnification effect of a change in taxes on the national debt. C) magnification effect of a change in taxes on the budget deficit. D) magnification effect of a change in taxes on government expenditures. E) magnification effect of a change in taxes on aggregate demand.
We showed above that a profit-maximizing firm will hire the number of workers such that the wage is equal to the value of the marginal product of labor
But, as the text showed in an earlier chapter, a profit-maximizing firm will produce the quantity of output such that price equals marginal cost. Are these two rules inconsistent?