Smaller firms tend to rely on financial intermediaries instead of financial markets for external financing due to

Prices of final goods and services in Eduland have increased by 23% between Year 1 and Year 2. If the GDP deflator of Eduland in Year 1 was 100, the GDP deflator of Eduland in Year 2 is ________

A) 50 B) 112 C) 103 D) 123

Paradoxically, when the economy most needs injections of money, the economic conditions are such that

a. borrowers are particularly eager to go to banks for loans b. borrowers are most reluctant to borrow (demand loans) from banks c. the FDIC will insist that banks raise the interest rate they charge borrowers d. the FSLIC and FDIC will insist that banks lower the interest rate they charge borrowers e. the Federal Reserve will print less money