The 2008 credit crunch occurred when banks reduced lending in response to
a. the loss of asset value for mortgage backed securities and mortgage loans.
b. having too little capital to satisfy capital requirements
c. an excess of bank capital.
d. an increase in the required reserve ratio.
a
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Chad's income went from $1000 per week to $1500 per week. As a result he increased his consumption of steak from 1 pound a week to 3 pounds a week. Based on his consumption patterns, the income elasticity of steak for Chad is
A) 2.50. B) -.50. C) .50. D) -1.50.
(Last Word) Suppose Balin has $100 to invest in an opportunity that returns, for every $100 invested, $120 if it goes well but only $80 if it goes poorly. If leverage allows Balin to borrow $90 for every $10 he invests, what are his rates of profit and
loss, respectively, if he borrows the full amount to invest in the opportunity? A. 20 percent profit; 20 percent loss. B. 33.3 percent profit; 50 percent loss. C. 200 percent profit; 100 percent loss. D. 1,100 percent profit; 100 percent loss.