As a result of financial innovation, which of the following is TRUE? I. Variable interest rate mortgages were created. II. The use of credit cards increased. III. Many money market mutual funds collapsed. I and II Il and III I and III I, II, and III

As a result of financial innovation, which of the following is TRUE? I. Variable interest rate mortgages were created. II. The use of credit cards increased. III. Many money market mutual funds collapsed. I and II Il and III I and III I, II, and III

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter6: Saving And Investing

Section6.2: Investing: Taking Risks With Your Savings

Problem 1R

See similar textbooks

Related questions

Q: illustrate the effect of each event on the market for red snapper fish and indicate the effects on ...

A: Red snapper fish and beef are substitute goods. A surgeon general warns that high cholesterol foods...

Q: Explain whether each of the following statements describes a change in demand or a change in quanti...

A: There are various determinants that affect the demand for the good. Non-price determinants lead to a...

Q: Assume that the US economy expands and that the US Federal Reserve Bank, worried by rising inflation...

A: If there is an expansion in the United States, it will lead to arise inflation in the economy due to...

Q: Assume you can work as many hours you wish at £12 per hour (net of tax). If you do not work, you hav...

A: Here there is a situation where we can work as many hours as we can want at the rate of £12 per hour...

Q: 2. Show on a diagram how a negative external effect can lead to a situation where marginal social co...

A: Profit maximization is that the method by that a corporation determines the rating, input, and outpu...

Q: 4. Show on a diagram how an individual may seek to smooth their consumption over their lifetime. How...

A: * ANSWER :- (4) Based on the given information the explanation is as follows.

Q: The market price of cheeseburgers in a college town decreased recently, and the students in an econo...

A: When the new burger joints recently opened in the area than it leads to a rise in the production of ...

Q: How did Europe's Industrial Revolution contribute to the Age of Imperialism? Select THREE answers th...

A: When talking about European Industrial Revolution, it was the situation when European countries were...

Q: When Kenadi O. trades with Kieran F. O only Kenadi O. benefits since Kieran F's high wage allows him...

A: Since you have asked multiple question, we will solve the first question for you. If you want any sp...

Q: Answer in not less than 100 words. How do economic forces to facilitate the deepening of globalizati...

A: Globalization refers to the spread of goods, technology, information, and jobs across borders. The s...

Q: . Pankti is risk averse. Without insurance, she receives income of $40,000 with a prob ability of .0...

A: Given , Probability of getting 40,000 = 0.02 Probability of getting 60,000 = 0.98 Pankti should pu...

Q: How increasing housing prices in the US to its highest historical levels affect the US economy and t...

Q: g equations: P = 48 – 2Q P = 24 + 2Q demand: supply: is the price of a bushel in dollars and Q is qu...

A: At equilibrium, demand = supply and graphically where demand & supply intersect or cross each ot...

Q: A man who retired becomes bored with retirement and begins to look for a job. During the time he is ...

A: Answer: Let us consider that the man who is retired now was working in a sector where retirement hap...

Q: Under perfect competition a firm will increase output if: A) marginal cost equals marginal rev...

A: A perfectly competitive firm takes the price set by the market forces and sells each unit of its out...

Q: Which family is more or high vulnerable? The Anuran Family because they live nearer to the shore...

A: Vulnerability is the extent of the emotion which comes from the uncertainty. There are 4 types of v...

Q: Define the population from which the sample is to be drawn. Specify the population frame from which ...

A: Sampling in economics is the process or method in which a part of the population commonly termed as ...

Q: A) a speCITIC brand of cereal B) cereal C) breakfast food O D) food

A: Which good has the most elastic demand.

Q: 1980 7.2 63.6 168.9 1990 6.3 66.4 190.0 2000 3.9 67.0 213.7 2010 138.4 64.8 236.8

A: The labour force, or currently active population, comprises all persons who fulfill the requirements...

Q: The equilibrium price in this market is $ per keyboard, and the equilibrium quantity is keyboards bo...

A: Equilibrium point is the point where quantity demanded is equal to quantity supplied. Equilibrium ha...

Q: Table 1: The following table contains some production possibilities for an economy for a given year ...

A: The answer is - Option 4: 4000 < x < 4600

Q: Expected Utility formulation was initially proposed as a solution to the St. Petersburg paradox (or,...

A: ANSWER The paradox known as the St. Petersburg Paradox is obtained by a simple coin flip game. The r...

Q: Question 9 An increase in the number of buyers in the market for fidget spinners will result in a fo...

A: Since you have asked multiple question, we will solve the first question for you. If you want any sp...

Q: The market for N-95 masks is perfectly competitive. Market Demand is given by Q=447-2P and Market Su...

A: A price floor is imposed by government on how low a price can be charged for a product, good, commo...

Q: The second group of students attributes the increase in the price of pizzas to the increase in the p...

A: When left to the self-adjusting market forces of demand and supply, an equilibrium level of quantity...

Q: A firm requires exactly four full-time workers to operate each piece of machinery in the factory. Us...

A: In economics, an isoquant is a curve that, when plotted on a graph, shows all of the combinations of...

Q: A firm will be better off by hiring an additional worker only when: The overall benefit is greater t...

A: A firm will be better off by hiring an additional worker only.

Q: Adverse selection occurs because of A) spreading of risks. B) diminishing marginal utility. C)...

A: Adverse selection occurs because of imperfect information, when the seller have information about th...

Q: 1.Which of the following is held constant along a demand curve? A) Tastes and preferences. B) ...

A: "Since you have asked multiple questions, we will solve first question for you .. If you want any sp...

Q: Suppose an economist develops an international trade model based on the assumption that there are on...

A: The Economist mostly considered only two countries and two goods for the better understanding of the...

Q: For less than $300, you can get a high-quality colour laser printer with four toner cartridges alrea...

A: When talking about the reconstruction or replacement cost of a product, companies sometimes charge a...

Q: Question 6 Emma S. and Madelyn G. charge people to park on their lawn while attending a nearby craft...

A: * ANSWER :- (6) From the given information the answer and explanation is provided as follows ...

Q: Draw the circular flow model and in your own words, discuss the operation of capitalism.

A: The circular flow of income refers to that model of the economy in which the exchanges are represent...

Q: ona

A: AD - AS model is equilibrium where AD curve and AS curve intersects and defines P price level and Y ...

Q: The 1-year bond yield is currently at 0.5% and the 2-year bond yield is 1%. Inflation is expected to...

A: Here, information about bond yield for one year and 2 year is given with the inflation rate of 2% in...

Q: 1.In 2015, the three world's largest exporters in descending order were A) China, Japan, USA B...

A: "Since you have asked multiple questions, we will solve the first question for you. If you want any ...

Q: Price (dollars) 15 B 10 5 D 50 100 150 200 250 Quantity (units) In the figure above, using the midpo...

A: * SOLUTION :-

Q: Paul loves hot drinks, and he has a part of his weekly budget earmarked for buying them. In the dia...

A: Indifference Curve:- An indifference curve is a graphical representation that depicts the bundle of ...

Q: . Can you sense the contrast between the Progressive reforms at home, and United States actions in L...

A: ANSWER The time of US history from the 1890s to the 1920s is generally alluded to as the Progres...

Q: 2. Externality. The table below lists the expected daily benefits between a resident that owns a tre...

A: There are two agents : Homeowner & Neighbor Benefit matrix is following : Homeowner Neighb...

Q: answer please, additional information has been given. Assume you can work as many hours you w...

A: Answer a).

Q: Equilibrium unemployment refers to unemployment that A) arises in a cyclical downturn. B) occu...

A: Unemployed occurs when people who are willing and able to work cannot find job.

Q: Suppose that Kat likes arrows and food. Kat's potential indifference curves for these two goods are ...

A: Answer: The assumptions of the indifference curves are as given below: (1). Indifference curves are ...

Q: Describe and justify your choice of the most appropriate indicators, such as GDP, literacy rates, he...

A: The measure which estimates the value being added in a country which is the sum of the final value o...

Q: 2. "It would be misleading to use GDP as an index of social well-being." Explain the reasoning behin...

A: Gross domestic product of a country is the market value of all final commodities and services that a...

Q: A supply and demand puzzle e following graph shows the market for laptops in 2010. Between 2010 and ...

A: The demand curve is a graphical representation of the negative relationship between the price and th...

Q: Greece and Finland produce and consume two goods, timber (1) and dairy product (D). Labor is the sol...

A: Greece - Labor Hours for (T) = 1 hr Total T that can be produced = 30,000/1 = 30,000 Labor Hours fo...

Q: Suppose that the government imposes a proportional income tax on the representative consumer’s wage ...

A: Labor and Income: The majority of people earn the majority of their money by leasing their labour. ...

Q: 6. (See week 5 Autumn Term) Assume you can work as many hours you wish at £12 per hour (net of tax)....

A: ANSWER Assume you can work as many hours you wish at £12 per hour (net of tax). If you do not wor...

Q: Northland Bank plc has £600 million in deposits. It faces a statutory liquidity ratio of 10%. It mus...

Question

As a result of financial innovation, which of the following is TRUE?
Variable interest rate mortgages were cre ated.
II. The use of credit cards inareased.
III. Many money market mutual funds collapsæd.
I.
I and II
Il and III
I and III
I, II, and III

Expert Solution

Step 1

Answer-

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Which type of financial intermediary provides individual investors with professional management of their money and diversification in order to limit the risk of investing? A. mutual funds B. insurance companies C. hedge funds D. investment banks
1. How does a mutual fund lower transactions costs through economies of scale?
Which statement is incorrect related to financial intermediaries (institutions)? a. They are firms that specialize in financial intermediation - a process of borrowing funds from SSUs and lending such funds to the DSUs. b. The main objective of financial intermediaries is to convert savings from SSUs into investments. c. They are the biggest investors in equity securities in the PSE d. They offer the highest returns and lowest risks when compared to alternative investments available to SSUs. e. none of the above
A bond that is bought at a price below its face value and the face value is repaid at a maturity date is called a: Select one: a. simple loan b. fixed-payment loan. c. Coupon bond. d. Discount bond
The main advantage of mutual funds is that theyprovidea. a return insured by the government.b. an easy way to hold a diversified portfolio.c. an asset that is widely used as the medium ofexchange.d. a way to avoid fluctuations in stock and bondprices.
In many situations, financial innovations are viewed as innovative variations on existing technologies and business strategies, rather than as completely new concepts. Explain why? Include 1 example showing the above.
Allen would like to open a business to produce a software that he thinks would be well-received by the market. However, the investment needed to start a busi- ness is very high and Allen could barely cover it on his own. The software is very likely to be successful and generate profits, but it takes 2 years before profits are generated. Explain why the existence of a financial intermediary, like a bank, makes Allen’s investment more likely.
In how many categories, financial system is classified?
The connection between financial management and financial market
_________________ are a unit of measurement in which the relative value of goods and services can be expressed. A. Mutual Funds B. Curency C. Demand Deposits D. Prices
Compare credit, savings, and investment services available to the consumer from financial institutions.
Since 1982, banks and thrift institutions have offered a type of savings account that yields a market rate of interest with a minimum balance and a limit on transactions. These accounts, which have no minimum maturity, are known as Select one: a. repurchase agreements. b. money market mutual funds. c. mutual funds. d. certificates of deposit.