Which of the following is a source of market failure?
A. Private goods.
B. Government intervention.
C. Market power.
D. None of the choices are correct.
Answer: C
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In the recent Global Economic Crisis, all of the following are causes that pushed the IS curve to the left EXCEPT
A) the negative wealth effect from the collapse of the housing bubble. B) the end of cash-out mortgage refinancing. C) growing unwillingness of banks and nonbank financial institutions to grant loan. D) slow and minimal response of the U.S. government.
The Emission Trading Scheme of the European Union
A) created a market for pollutants. B) sets a cap on the amount of pollutants in each country. C) allowed firms to benefit from emitting pollutants. D) sets the amount of per-unit tax on each pollutant.
Which of the following is true of technology?
a. Technological improvements are less important today than was true in the past. b. Lack of access to modern technology is a major barrier restraining the growth of low-income countries. c. Often, perverse institutions and policies in low-income countries undermine the potential gains from adoption of modern technology. d. Countries with high investment rates will be unable to apply modern technology effectively.
Which of the following actions best illustrates adverse selection?
a. A person adds risky stock to his portfolio. b. A person who has narrowly avoided many accidents applies for automobile insurance. c. A person is unwilling to buy a stock when she believes its price has an equal chance of rising or falling $10. d. A person purchases homeowners insurance and then checks his smoke detector batteries less frequently.