In order for someone to switch from borrowing to saving when the interest rate falls, it must be that current consumption is an inferior good.
Answer the following statement true (T) or false (F)
False
Rationale: It is not possible for a consumer whose intertemporal tastes satisfy our basic assumptions to switch from borrowing to saving when the interest rate falls -- regardless of what kind of good current consumption is.
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Refer to the scenario above. Which of the following problems is most likely to arise in this case?
A) Adverse selection B) Moral hazard C) The tragedy of the commons D) The free-rider problem
All of these factors create economies of scale, except
a. Specialization and Division of Labor b. Technological Factors c. Increase in advertisement costs d. Quantity discounts
In the BankInc case, the change in assignment for caseworkers was made practical by
A. computerization of task input for managerial oversight. B. centralized functional management systems. C. integrating credit checking with pricing, but maintaining document preparation in a separate department. D. elimination of cross-training among credit tasks.
What is the theory of efficiency wages? Provide four reasons that employers might pay efficiency wages