By influencing the current one-year rate and by affecting people's expectations of future short-term rates, the Fed can
A. influence long term interest rates.
B. set the reserve rate.
C. set the prime rate.
D. all of the above.
Answer: A
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An indication that Insurance companies anticipate adverse selection is
a. they do not require a deductible b. they do not classify clients into different risk types according to their claim history c. they do not classify clients into different risk types according to pre-existing conditions d. they require a co-payment
Which of the following decreases if the U.S. removes an import quota on computer components?
a. U.S. imports and U.S. exports. b. U.S. imports but not U.S. exports. c. U.S. exports but not U.S. imports. d. Neither U.S. exports nor U.S. imports.
One of the factors that causes differences in inequality across countries is:
A. how many income earners there are relative to total population. B. the extent to which governments redistribute income through the public budget. C. the amount of jobs that are available in the country. D. the labor force participation rate within countries.
Joe and Steve are duopolists who each can follow two strategies: cooperate and jointly act like a monopolist, or don't cooperate (cheat) and act like duopolists. Their profits are as follows:
What will they do?
What will be an ideal response?