In managing its liabilities to deal with liquidity problems, banks trade off
A) credit risk against interest rate risk.
B) adverse selection against moral hazard.
C) the need for available funds to meet deposit outflows against the desire for greater profit.
D) present tax liabilities against future tax liabilities.
C
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Kristen has an income of $450 per year to spend on music CDs and movies on DVDs. Initially the price of a CD is $15 and the price of a DVD is $22.50. The indifference curves in the figure above (I1, I2, and I3 ) reflect Kristen's preferences
If the price of a DVD falls to $18, Kristen will buy A) 10 DVDs and 15 CDs per year. B) 15 DVDs and 12 CDs per year. C) 12.5 DVDs and 11 CDs per year. D) 13 DVDs and 15 CDs per year.
What is an accurate implication resulting from an increase in income?
A) an increase in exchange rate B) a decrease in exchange rate C) a decrease in consumption D) a decrease in output E) an increase in consumption