During the early 1930s, the Fed was reluctant to rescue nonsolvent banks out of fear of encouraging:
A) moral hazard
B) adverse selection
C) bank run
D) sovereign debt crisis
A
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Suppose there are 3 voters in a legislature, and two projects are up for consideration. Project A creates benefits of 3 for district 1 but benefit of -1 in district 2 and -3 in district 3. Project B creates benefits of 3 in district 2, -1 in district 1 and -3 in district 3. a. Would either of these projects be implemented under simple majority rule voting (where each project is approved or not approved on its own)?
b. How would your answer to (a) change if the projects can be bundled? c. Is it efficient to fund these projects? d. Suppose the Coase Theorem applies to legislatures -- i.e. suppose legislators can create alternatives with cash side-payments. What might voter 3 do to prevent the outcome in (b)? e. True or False: If transactions costs are low and side-payments are allowed, only efficient projects will pass under vote trading. What will be an ideal response?
When the price of tortilla chips rose by 10 percent, the quantity of tortilla chips sold fell 4 percent, and the sale of dips (like salsa and bean dip) fell 8 percent
This set of facts indicates that the cross-price elasticity between tortilla chips and dips is ________, so the two are ________. A) 0.4; substitutes B) -0.4; complements C) -0.8; complements D) 0.8; substitutes
When demand increases in a perfectly competitive market, the market price:
A. increases in the short run and falls in the long run. B. decreases in the short run and increases in the long run. C. increases in the short run and stays permanently higher in the long run. D. decreases in the short run and stays permanently lower in the long run.
The price of imported oil decreased in 2001 . How did this affect the aggregate supply curve?
a. It became steeper. b. It became flatter. c. It shifted inward. d. It shifted outward.