Large number of independent loan prospects

Reference no: EM131005123

Large number of independent loan prospects are available, each paying return of \$16 on \$100 with probability of 1/2 and 1/2 of \$4 return. Each saver in economy derives happiness from income according to: H= I^(1/2) Competition between banks so each have costs--including normal profits--of .1 on every \$100. What return will banks pay? Why? At this rate will they attract savers away from "going it alone" from lending directly, with each saver making a single loan? How do you know? What is the gain in happiness per saver from the existence of intermediaries? If there were a single intermediary with no competition, what return would the intermediary seeking maxim profit offer? Explain

Key difference between elite and pluralist theory

According to the text, does the United States better fit the pluralist model or the major itarian model? Why? Explain the key difference between elite and pluralist theory

Worth of new construction bonds

To pay off \$41,000,000 worth of new construction bonds when they come due in 20 years, a water municipality must deposit money into a sinking fund. Payments to the fund will b

Find better equality for them in our world trade system

In the unit lesson for this module, it is suggested that all things in trade are not equal. How would you help disadvantaged countries to find better equality for them in our

Calculate the arc elasticity of demand for buses on the run

Transit buses on a local San Francisco run carry 1000 passengers a day who are each charged 50 cents. The marketing department feels that by raising the price to 75 cents, rid

Demand for good is elastic if quantity demanded

Demand for a good is elastic if quantity demanded ________________ in response to a price change. a. changes very little b. changes significantly c. stays the same d. changes

Price elasticity of supply is always positive except

Price elasticity of supply is always positive except when supply is a. perfectly inelastic. b. relatively elastic. c. either relatively elastic or relatively inelastic. d. rel

Total hours worked in the nonfarm business sector

Between Q1, 2014 and Q1, 2015 measured Output in the non - farm business sector increased by 3.2%. During this time period the unemployment rate fell from 6.6% to 5.5% and tot

Agriculture and capital is specific to manufacturing

Examine the impact on a small country following an outward flow of immigrants that decreases its labor force. Assume that land is specific to agriculture and capital is specif