Financial intermediaries reduce the costs of negotiation by
A) investing in a large number of projects with independent returns.
B) gaining expertise in evaluating and monitoring investments.
C) investing in a small number of projects with independent returns.
D) pooling funds.
D
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Indicate whether the statement is true or false
Suppose there was a debate regarding Medicaid budgets and the Democrat was arguing for a budget increase from $400 billion to $500 billion and the Republican was arguing for the budget to increase to only $410 billion. Further, suppose health care costs are projected to remain constant though the number of eligible people is projected to rise 10%. The Democrat accuses the Republican of proposing a cut to health care while, the Republican insists his plan increases Medicaid spending. What is going on here?
A. Both are proposing increases. The Democrat is lying, regardless of budgeting technique. B. Both are proposing cuts. They are both lying, regardless of budgeting technique. C. The Republican is cutting Medicaid only if you use current services budgeting. D. The Republican is cutting Medicaid only if you use baseline budgeting.