Answer to Question #178662 in Microeconomics for James

Question

1. How would increased U.S. public debt affect equilibrium price and quantity for capital in U.S. financial markets?

1. The supply of financial capital would decrease.
2. Interest rates would rise.
3. The amount of financial investment would decrease.
4. All of the above.
5. None of the above.

2. Firms that issue credit cards:

1. Must charge higher interest rates to cover losses created by those who do not repay loans.
2. Must charge higher interest rates to satisfy the price ceiling imposed by the government.
3. Must charge higher interest rates to satisfy the price floor imposed by the government.
4. Must charge lower rates to cover losses created by those who do not repay loans.
5. All of the above. 

3. The market system is:

1. An efficient mechanism for information.
2. Rarely used in the real world.
3. The only system used in the real world.
4. All of the above.
5. None of the above.

Answer 1

1. How would increased U.S. public debt affect equilibrium price and quantity for capital in U.S. financial markets?

Answer:

All of the above.

2. Firms that issue credit cards:

Answer:

Must charge higher interest rates to cover losses created by those who do not repay loans.

3.The market system is:

Answer:

An efficient mechanism for information