All else held constant, as the variance of a payoff increases, the
A) expected value of the payoff increases.
B) risk of the payoff increases.
C) expected value of the payoff decreases.
D) risk of the payoff decreases.
B
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Suppose one person buys a copy of Consumer Reports and gives away free copies to all who request one. This is an example of
A) free rider problem. B) moral hazard. C) adverse selection. D) economies of scale.
Analysis that involves value judgments about economic policies is
A) positive economics. B) normative economics. C) microeconomics. D) macroeconomics.
Which of the following would cause the money supply to increase?
a. An open market purchase by the Fed. b. A reduction in the discount rate. c. A reduction in required ratios. d. All of these.
The ________ posits that trade flows between countries will be larger as the economic sizes of the two countries are larger and the geographic distance between the two countries is smaller.
A. gravity model B. Heckscher-Ohlin model C. Stolper-Samuelson theorem D. theory of absolute advantage