The threat of a Greek exit from the euro system
A. left Greek banks bankrupt.
B. led to the exit of Spain from the euro.
C. increased the viability of the Greek exit.
D. spurred economic activity in Greece.
Answer: A
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People with savings often deposit their funds in a commercial bank, rather than investing them directly with business enterprises, in order to
A) avoid the problems associated with asymmetric information. B) earn the highest possible return for taking on the riskiest investments. C) avoid the problems associated with financial intermediation. D) All of the above are correct.
The law of diminishing marginal returns
A. causes average fixed costs to decline continuously as output increases. B. causes the difference between average total cost and average variable cost to shrink as output increases. C. results in MC but not ATC curves eventually increasing at an increasing rate. D. results in average variable cost (AVC), average total cost (ATC), and marginal cost (MC) curves eventually increasing at an increasing rate.