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MACRO ECONOMICS - PLEASE OUTLINE CORRECT ANSWERS Consider the following problem with asymmetric information in the credit market. Suppose that the lending interest rate (r1)

MACRO ECONOMICS - PLEASE OUTLINE CORRECT ANSWERS

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Consider the following problem with asymmetric information in the credit market. Suppose that the lending interest rate (r1) is 20%, and 25% of all the borrowers will NOT repay the loan. Taking the default risk into account, what is the borrowing interest rate (r2)? O A. 160% O B. 380% O C. 6% O D. 60% O E. None of the aboveIn the Malthusian model, population growth depends on O A. income per worker. O B. labour supply. O C. consumption per worker. O D. total factor productivity. O E. level of nutrition.The endowment point is the consumption bundle in which O A. second-period consumption is equal to zero. O B. the consumer finds the most utility. O C. consumption is equal to disposable income in each period. O) D. consumption is equal to savings in each period. O E. first-period consumption is equal to zero

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