Which of the following was the main reason for increased counterparty risk in the shadow banking system prior to the financial crisis of 2007-2009?
A) increased leverage
B) government insuring money market deposits
C) many firms borrowing long term for short-term investments
D) trading of derivatives on exchanges
A
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The assumption of ceteris paribus holds well in the real world
a. True b. False Indicate whether the statement is true or false
The difference between price elasticity of demand and income elasticity of demand is that
A) income elasticity of demand examines how an individual's income changes when prices change and the price elasticity of demand examines how quantity demand changes when price changes. B) income elasticity refers to the movement along the demand curve while price elasticity refers to a horizontal shift of the demand curve. C) income elasticity measures the responsiveness of income to changes in supply while price elasticity of demand measures the responsiveness of demand to a change in price. D) income elasticity refers to a horizontal shift of the demand curve while price elasticity of demand refers to a movement along the demand curve.