- 17.1: Answer these three questions about early-stage corporate finance: a...
- 17.2: From a firms point of view, how is a bond similar to a bank loan? H...
- 17.3: Calculate the equity each of these people has in his or her home: a...
- 17.4: Which has a higher average return over time: stocks, bonds, or a sa...
- 17.5: Investors sometimes fear that a high-risk investment is especially ...
- 17.6: What is the total amount of interest collected from a $5,000 loan a...
- 17.7: If your receive $500 in simple interest on a loan that you made for...
- 17.8: You open a 5-year CD for $1,000 that pays 2% interest, compounded a...
- 17.9: What are the most common ways for start-up firms to raise financial...
- 17.10: Why can firms not just use their own profits for financial capital,...
- 17.11: Why are banks more willing to lend to wellestablished firms?
- 17.12: What is a bond?
- 17.13: What does a share of stock represent?
- 17.14: When do firms receive money from the sale of stock in their firm an...
- 17.15: What is a dividend?
- 17.16: What is a capital gain?
- 17.17: What is the difference between a private company and a public company?
- 17.18: How do the shareholders who own a company choose the actual manager...
- 17.19: Why are banks called financial intermediaries?
- 17.20: Name several different kinds of bank account. How are they different?
- 17.21: Why are bonds somewhat risky to buy, even though they make predeter...
- 17.22: Why should a financial investor care about diversification?
- 17.23: What is a mutual fund?
- 17.24: What is an index fund?
- 17.25: How is buying a house to live in a type of financial investment?
- 17.26: Why is it hard to forecast future movements in stock prices?
- 17.27: What are the two key choices U.S. citizens need to make that determ...
- 17.28: Is investing in housing always a very safe investment?
- 17.29: If you owned a small firm that had become somewhat established, but...
- 17.30: Explain how a company can fail when the safeguards that should be i...
- 17.31: What are some reasons why the investment strategy of a 30-year-old ...
- 17.32: Explain why a financial investor in stocks cannot earn high capital...
- 17.33: Explain what happens in an economy when the financial markets limit...
- 17.34: You and your friend have opened an account on E-Trade and have each...
- 17.35: How do bank failures cause the economy to go into recession?
- 17.36: The Darkroom Windowshade Company has 100,000 shares of stock outsta...
- 17.37: Imagine that a $10,000 ten-year bond was issued at an interest rate...
- 17.38: Suppose Ford Motor Company issues a five year bond with a face valu...
- 17.39: How much money do you have to put into a bank account that pays 10%...
- 17.40: Many retirement funds charge an administrative fee each year equal ...
Solutions for Chapter 17: Financial Markets
Full solutions for Principles of Economics | 1st Edition
a curve that shows the quantity of goods and services that households, firms, the government, and customers abroad want to buy at each price level
the equipment and structures used to produce goods and services
goods that are excludable but not rival in consumption
a table that shows the relationship between the price of a good and the quantity demanded
the interest rate on the loans that the Fed makes to banks
total revenue minus total cost, including both explicit and implicit costs
economies of scale
the property whereby long-run average total cost falls as the quantity of output increases
the amount of money in the future that an amount of money today will yield, given prevailing interest rates
a good for which, other things being equal, an increase in income leads to a decrease in demand
the political philosophy according to which the government should choose policies deemed just, as evaluated by an impartial observer behind a “veil of ignorance”
the increase in output that arises from an additional unit of input
marginal tax rate
the amount that taxes increase from an additional dollar of income
the claim that the government should aim to maximize the well-being of the worst-off person in society
two goods with right-angle indifference curves
the stock of equipment and structures that are used to produce goods and services
a particular “game” between two captured prisoners that illustrates why cooperation is difficult to maintain even when it is mutually beneficial
goods that are neither excludable nor rival in consumption
regulations on the minimum amount of reserves that banks must hold against deposits
a situation in which quantity demanded is greater than quantity supplied
a government program that partially protects workers’ incomes when they become unemployed