Credit cards are
A. Included in both the M1 and M2 definitions of the money supply
B. Included in the M1 definition of the money supply, but not in the M2 definition
C. Included in neither the M1 definition of the money supply nor in the M2 definition
Answer: C. Included in neither the M1 definition of the money supply nor in the M2 definition
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Opponents of free trade often want the United States to prohibit the import of goods made in overseas factories that pay wages below the U.S. minimum wage. Prohibiting such goods is likely to
a. cause these factories to pay the U.S. minimum wage. b. increase the rate of technological advance in poor countries so that they can afford to pay higher wages. c. increase poverty in poor countries and benefit U.S. firms which compete with these imports. d. harm U.S. firms which compete with these imports.
Your neighbor in an apartment complex plays his music very loudly late at night, which makes it difficult for you to get to sleep. You offer the neighbor $50, the monetary value you put on your sleep, to never play his music between midnight and 7 AM. By
doing so A) you have failed to bring about an efficient solution since you should have complained to the police. B) you have indicated the cost of the externality. The externality is not internalized even if he accepts your offer. C) you have indicated the cost of the externality, which internalizes the externality. D) you have indicated a willingness to make the external cost a social cost.
Which of the following is not a characteristic of a battle of the sexes game?
A) Each player has a dominant strategy. B) Nash equilibria exist at every outcome where the players successfully coordinate. C) The two general outcomes are where players either coordinate with one another or they do not. D) The payoff for coordinating is higher than the payoff for not coordinating.
An insurance company holding a single-home mortgage should be most concerned about the mortgage's __________ risk
A) default B) prepayment C) price fluctuation D) collateral