What do you think of the following statement: To the extent to which individuals are aware of their self-control problems, markets can address the issue successfully.
What will be an ideal response?
If an individual knows his beta in a beta-delta model, he is willing to pay now to bind his future self to what his current self believes is optimal. Financial markets can then structure financial instruments that will accomplish this. Put differently, to the extent to which individuals are aware of their self-control problems, there is a market for commitment devices.
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Refer to Table 9-12. If the actual terms of trade are 1 belt for 1.5 swords and 50 belts are traded, how many swords will Morocco consume?
A) 60 B) 75 C) 135 D) 200
The Federal Reserve float is
A) items in process of collection - deferred credit items. B) items in process of collection + deferred credit items. C) deferred credit items - items in process of collection. D) deferred credit items + items in process of collection.
In a closed economy, the formula for private saving is: Sprivate = Y - C - T + TR
a. True b. False Indicate whether the statement is true or false
The main function of the Federal Open Market Committee is
a. to control the printing of currency. b. to determine the path of tax rates. c. to use open market operations to control the nation's money supply. d. to create and issue bonds on behalf of the Treasury. e. to oversee economic activity in the various Federal Reserve districts.