Your Current Liquidity Ratio Is 2

question 73

Multiple Choice

Your current liquidity ratio is 2.0.If you take money out of your savings account to pay off a credit card your liquidity ratio will

• A)increase.
• B)decrease.
• C)stay the same.
• D)More data is needed to determine what affect this action will have.

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Definitions:

MSC

MSC stands for Marginal Social Cost, which is the total cost to society of producing an additional unit of a good or service, including both private and external costs.

Coase Theorem

An economic theory that suggests that if property rights are clearly defined and transaction costs are negligible, private negotiations will lead to the efficient resolution of disputes regardless of the initial allocation of rights.

Coase Theorem

A theory suggesting that if trade in an externality is possible and there are no transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property.

Coase Theorem

A legal and economic theory stating that if trade in an externality is possible and there are no transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property rights.