The credit spread refers to ________
A) the extent to which financial instruments are distributed among households at different income levels in a given society
B) the difference between the London Inter-Bank Offered Rate (LIBOR) and the fed funds rate
C) the price elasticity of household debt
D) the interest-rate differential between risky bonds and U.S. Treasury bonds
D
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The effects of asymmetric information in the car market can be weakened by:
a. providing a warranty for the product. b. purchasing business interruption insurance. c. inserting a "buyer beware" clause in the agreement. d. buying a "put" option.
Which of the following is the legal right of ownership that others are not allowed to infringe on without paying compensation?
a. A command-and-control regulation b. Corrective taxes c. Marketable permits d. Property rights