In developed industries, the interest rate tends to be lower than in newer industries. What could explain this?
A) greater demand for loans in the developed industry
B) greater supply for loans in the new industry
C) greater demand for loans in the new industry
D) lower supply for loans in the developed industry
C
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The "lemons" problem is that
a. cars of verifiable high quality are withheld from the used car market b. cars of verifiable low quality are withheld from the used car market c. cars of unverifiable high quality are withheld from the used car market d. cars of unverifiable low quality are withheld from the used car market
Refer to the table. Suppose the legal reserve requirement is 10 percent and initially there are no excess reserves in the banking system. If the Fed wished to reduce the interest rate by 1 percentage point, it would:
A. sell $10 of government bonds in the open market.
B. buy $100 of government bonds in the open market.
C. sell $100 of government bonds in the open market.
D. buy $10 of government bonds in the open market.