An Ultimate and Important Cause of Financial Innovation Does Not

question 16

Multiple Choice

An ultimate and important cause of financial innovation does not involve ________.

• A) incentives to follow existing regulation and and tax laws.
• B) increased volatility of interest rates, inflation, equity prices, and exchange rates.
• C) changing global patterns of financial wealth.
• D) financial intermediary competition.

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Definitions:

Facebook

A social networking platform that allows users to create profiles, share photos and videos, send messages, and keep in touch with friends, family, and colleagues.

Positive Externality

A benefit that affects a party who did not choose to incur that benefit, often associated with public goods or services.

Price Elasticity

The measure of how the quantity demanded of a good or service changes in response to a change in its price.

Demand

The desire and ability of consumers to purchase goods or services at a given price.