Which of the following can be a solution to the lemons problem?
a. Providing testimonials from previous buyers.
b. Providing accessories to be used in the car.
c. Providing discount on the purchase of a car.
d. Providing a warranty that covers the costs of certain repairs.
D
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The desired reserve ratio is 10 percent. Joe deposits $1,000 in Bank A. Bank A keeps its minimum desired reserves and lends the excess to Fred
Fred spends his loan at J.C. Penney. J.C. Penney deposits the check it receives from Fred in Bank B. Bank B keeps its minimum desired reserves and lends the excess to Mary. How much can Bank B lend to Mary? A) $90 B) $900 C) $810 D) $1,000 E) $100
The most commonly traded product (by value) in recent years has been
A) petroluem. B) wheat. C) televisions, stereos, and VCRs. D) automobiles.
Which of the following is least likely to induce precautionary saving?
a) the decision to retire from work at age 62 b) the possibility of being laid-off from work c) the uncertainty of one’s lifetime d) the risk of becoming ill e) the prospect of a potentially large tax increase in the future
Which of the following characterizes stagflation?
A. A decrease in unemployment but an increase in inflation. B. An increase in both unemployment and inflation. C. An increase in unemployment but a decrease in inflation. D. A decrease in both unemployment and inflation.