A price floor is a reasonable price control mechanism to impose in cases where the government believes the market's equilibrium price
a. creates an excess supply that will force price downward
b. is too high
c. creates an excess demand that will force price upward
d. is too low
e. is higher than the market price
D
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Because of ________, the market will provide ________ the socially optimal level of information.
A. the problem of adverse selection; less B. moral hazard; more C. the credibility problem; more D. the free-rider problem; less
A merger between firms in which one firm purchases an input from the other is called a
A. horizontal merger. B. vertical merger. C. conglomerate merger. D. none of these.
Lines of credit provided by financial intermediaries:
A. are pre-approved loans that can increase liquidity and lowering transaction costs. B. decrease liquidity for customers but increase income for the intermediary. C. are costly for intermediaries to provide so are only available to large commercial customers. D. require deposits in the intermediary that equal or exceed the amount of the line of credit.
The time it takes a change in economic policy to induce people and firms to change their behavior is the implementation lag.
Answer the following statement true (T) or false (F)