Financial markets enable the transfer of risk by:
A. making sure that higher default risk is offset by greater liquidity.
B. enabling even unsophisticated investors to purchase highly complex financial instruments.
C. requiring that risk-averse investors have access to U.S. Treasury bond markets.
D. allowing individuals and firms less willing to bear risk to transfer risk to other individuals and firms more willing to bear risk.
Answer: D
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Refer to Figure 4-10. Suppose that instead of a price ceiling, the government imposed a price floor of R1. What is the quantity of apartments demanded at the new price?
A) Q1 B) 0 C) Q0 D) Q*
Which of the following represents the law of supply?
A) An increase in the price of a good causes an increase in the supply of that good. B) An increase in the price of a good causes a rightward shift of the supply curve for that good. C) An increase in the price of a good causes an increase in the quantity supplied of that good. D) all of the above