An important type of information asymmetry is:
A. ethical constraint.
B. advantage imbalance.
C. information withholding.
D. moral hazard.
Answer: D
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What will be an ideal response?
Which of the following policy actions could speed productivity growth?
I. Tax incentives to encourage saving II. Encouraging international trade III. Directing public funds toward financing basic research A) II only B) I and III C) I only D) I, II, and III
If a central bank does not want to allow the domestic currency to depreciate, it will ________ international reserves by purchasing its currency, thereby ________ the monetary base and increasing the risk of higher unemployment
A) lose; decreasing B) lose; increasing C) acquire; decreasing D) acquire; increasing
The ways to escape a prisoner's dilemma is to
A) make commitments and play the game repeatedly. B) collude. C) find a dominant strategy. D) give up the game.