How did the role of government in the East Asian miracle become a factor in the currency crisis of the late 1990s?
What will be an ideal response?
Governments played a role in resource allocation by directing capital to firms deemed important to development. When governments continued to favor firms that were not performing well, resources were poorly allocated and firms' debt problems became serious.
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The Fed raises the federal funds rate when it
A) fears inflation. B) wants to increase the quantity of money. C) fears recession. D) wants to encourage bank lending. E) cannot change the quantity of money.
The __________ is equal to the current stock price minus the option exercise price
A) settlement price B) discount price C) intrinsic value D) mark-to-market settlement
How do online auction sites like Ebay attempt to overcome the asymmetric information problems associated with goods that the buyer cannot personally inspect before purchase?
A) The online auction firm only allows high-quality merchandise to be sold at their site. B) The previous performance (reputations) of the buyer and seller are posted for public review. C) Buyers can take receipt of any goods before they have to pay the seller. D) all of the above
Assuming the demand curve is more elastic (flatter) than the supply curve, which of the following is true?
a. The full tax is always passed to the consumer no matter how flat (elastic) the demand curve is. b. The full tax is always passed to the seller no matter how flat (elastic) the demand curve is. c. The smaller the portion of a sales tax that is passed to the consumer. d. It does not make any difference how flat (elastic) the demand curve is; the tax is always split evenly between buyer and seller.