In the diagram, (1) is the:
A. expected-rate-of-return curve and (2) is the average total cost curve.
B. total revenue curve and (2) is the interest-rate cost-of funds-curve.
C. expected-rate-of-return curve and (2) is the interest-rate cost-of-funds curve.
D. marginal cost curve and (2) is the marginal benefit curve.
C. expected-rate-of-return curve and (2) is the interest-rate cost-of-funds curve.
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If growing income inequality results from or encourages more rent seeking that, as a whole, make society worse off, this will
A) increase the size of the economic pie despite the income inequality. B) decrease the size of the economic pie. C) not change the size of the economic pie because the rent-seeking behavior will benefit enough parties to completely offset the effects of the increases in income inequality. D) result in complete income inequality as rent seeking continues to occur in the future.
Bond rating agencies are important in the channeling of funds to __________ firms in __________-oriented systems
A) small; banking B) small; markets C) large; banking D) large; markets