Which of the following is not a problem for the price system allocating resources among different time periods?
a. Interest rates are used for a variety of purposes other than influencing investment.
b. The market devotes too much to immediate consumption.
c. Our market system leads to lesser real incomes for later generations.
d. Our market system despoils irreplaceable natural resources.
c
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What are the information costs faced by savers?
What will be an ideal response?
What is the term for the contract that maximizes the principal's payoff subject to the constraint that the principal lacks the agent's private information?
a. First best b. Second best c. Third best d. Pareto optimum
Which of the following is not a loan of funds?
a. home mortgage b. government bond c. corporate stock d. corporate bond
Gross Domestic Product in the U.S. is roughly:
A. more than six times M1. B. twice as large as M2. C. equal to M1. D. equal to M2.