When you borrow money from a bank, your bank charges you interest on the loan to compensate for all of the following except
A) inflation.
B) liquidity risk.
C) the risk of default.
D) the opportunity cost of other uses for the loaned money.
B
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Gordon is a person who sells narcotics "on the street." This type of illegal activity:
A. Would be considered double counting in calculating GDP B. Is estimated and included in GDP figures C. Is excluded from GDP figures D. Causes GDP to be overstated
Which of the following is true of the gravity model?
A. The gravity model states that the trade flows between two countries are proportional to the countries' land masses. B. The gravity model states that the trade flows between two countries are directly proportional to their gross domestic product (GDP). C. The gravity model states that trade flows between a developing and a developed nation are usually unidirectional. D. The gravity model emphasizes the role of the government to generate adequate gains from trade.