Government debt held by citizens of a country is:
A. more like an individual's debt because paying interest on it involves no net reduction in domestic income.
B. more like an individual's debt because paying interest on it involves a net reduction in domestic income.
C. less like an individual's debt because paying interest on it involves no net reduction in domestic income.
D. less like an individual's debt because paying interest on it involves a net reduction in domestic income.
Answer: C
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An institution that collects funds from lenders and distributes these funds to borrowers is called
A) a financial intermediary. B) the Federal Reserve System. C) a mercantile exchange. D) a currency market.
The lemons problem is that when there are hidden characteristics known only to the seller of a used car,
a. the ratio of lemons to high-quality cars is likely to be high b. the ratio of lemons to high-quality cars is likely to be low c. good used cars will sell for more than their market value d. no lemons will be offered on the market e. the price of lemons will be below their market value