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The credit market: borrowers, lenders, and the rate of interest

Authored by Lerry Mehoi

Business

1st - 5th Grade

Used 1+ times

The credit market: borrowers, lenders, and the rate of interest
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6 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is income

the amount of money one receives over some period of time (flow).

Buildings, land, machinery, capital goods – debts owed + debts owed to you

•The maximum amount you could consume and leave wealth unchanged.

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is depreciation?

reduction in the value of a stock of wealth over time.

rearrange our capacity to buy goods and services across time

expenditure on newly produced capital goods.

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Interest rate (r)

The value of an additional unit of consumption declines, the more consumption the individual has.

Tradeoff between current and future consumption

The price of bringing some buying power forward in time.

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Borrowing and lending allow us to rearrange our capacity to buy goods and services across time.

True

False

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Myopia (short-sightedness): People experience the past satisfaction more strongly than the same satisfaction later.

True

False

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

A balance sheet summarises what the household or firm owns, and what it owes to others.

True

False

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