Credit rationing is defined as the process by which those with less wealth borrow on
unfavorable terms, compared to those with more wealth. Select all of the following
that can be consequences of credit rationing.
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An increase in income inequality.
Higher interest rates for those with lower wealth.
Some poor borrowers with good business ideas cannot get loans.
Figure 10-2 shows that as the_________ increases, a borrower's feasible consumption set
_________.
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, interest rate; shrinks
Using constant 2011 purchasing power parity dollars, real GDP in China grew from
$13,570 in 2015 to $14,401 in 2016 for a growth rate of ____%. Round your answer to one
decimal point and do not include the % sign, e.g. 8.3.
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6.1%
In an economy with a population of 100, there are u unemployed, n employees, and
100 - u - n firm owners, who each own one firm. The firms are identical, so they
employ the same number of workers and they pay the same wage. The government
now introduces unemployment insurance. The following diagram shows the Lorenz
curve of the economy before this change, and in the short run afterwards. The Gini
coefficient prior to the introduction of unemployment insurance (corresponding to
the solid Lorenz curve) is 0.36. Based on this information, which of the following
statements is correct?
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D. The Gini coefficient has fallen to 0.24 (2 decimal places).
In order to better understand and illustrate the complex economic forces in the
world, economists build ________ which simplify reality but allow us to focus on
important factors.
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, models
If a bank has loans and other assets of $135 million and deposits and liabilities of $130
million, then it's net worth (or equity) is $_____million.
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5
Even firms with a lot of market power cannot set prices as high as they want because
as price _______, quantity _________, eventually leading to lower profits.
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D. increases; decreases
Which of the following is not generally considered a useful measure of a country's
standard of living?
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Nominal GDP
The _____________ is set by the firm in dollars while the ___________ describes how much the
wage can buy for the worker.
unfavorable terms, compared to those with more wealth. Select all of the following
that can be consequences of credit rationing.
Give this one a try later!
An increase in income inequality.
Higher interest rates for those with lower wealth.
Some poor borrowers with good business ideas cannot get loans.
Figure 10-2 shows that as the_________ increases, a borrower's feasible consumption set
_________.
Give this one a try later!
, interest rate; shrinks
Using constant 2011 purchasing power parity dollars, real GDP in China grew from
$13,570 in 2015 to $14,401 in 2016 for a growth rate of ____%. Round your answer to one
decimal point and do not include the % sign, e.g. 8.3.
Give this one a try later!
6.1%
In an economy with a population of 100, there are u unemployed, n employees, and
100 - u - n firm owners, who each own one firm. The firms are identical, so they
employ the same number of workers and they pay the same wage. The government
now introduces unemployment insurance. The following diagram shows the Lorenz
curve of the economy before this change, and in the short run afterwards. The Gini
coefficient prior to the introduction of unemployment insurance (corresponding to
the solid Lorenz curve) is 0.36. Based on this information, which of the following
statements is correct?
Give this one a try later!
D. The Gini coefficient has fallen to 0.24 (2 decimal places).
In order to better understand and illustrate the complex economic forces in the
world, economists build ________ which simplify reality but allow us to focus on
important factors.
Give this one a try later!
, models
If a bank has loans and other assets of $135 million and deposits and liabilities of $130
million, then it's net worth (or equity) is $_____million.
Give this one a try later!
5
Even firms with a lot of market power cannot set prices as high as they want because
as price _______, quantity _________, eventually leading to lower profits.
Give this one a try later!
D. increases; decreases
Which of the following is not generally considered a useful measure of a country's
standard of living?
Give this one a try later!
Nominal GDP
The _____________ is set by the firm in dollars while the ___________ describes how much the
wage can buy for the worker.
