During financial crisis of 2008-09, the government rescued financial firms and the auto industry. As a result,
A) the government's budget deficit increased, the government's demand for loanable funds increased and private investment was crowded out.
B) the government's rescue plan created a surplus of loanable funds.
C) the private demand for loanable funds increased.
D) the supply of loanable funds decreased in response to the government's budget deficit.
E) real interest rates decreased.
A
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Figure 14.1 represents the market for used bikes. Suppose buyers are willing to pay $200 for a plum (high-quality) used bike and $50 for a lemon (low-quality) used bike. If buyers believe that 50% of used bikes are lemons (low quality), how many plums (high quality) will be supplied by sellers?
A. 8 B. 12 C. 16 D. 22
When the percentage change in the quantity supplied equals the percentage change in price, the supply is
A) elastic. B) inelastic. C) unit elastic. D) perfectly elastic. E) perfectly inelastic.
The Nash equilibrium in a Bertrand game of price setting where all firms have different marginal cost is:
a. efficient because all mutually beneficial transactions will occur. b. efficient because of the free entry assumption. c. inefficient because some mutually beneficial transactions will be foregone. d. inefficient because of the uncertainties inherent in the game.
In 2016, Social Security and Medicare payments accounted for almost _____ of federal outlays
a. 7 percent b. 25 percent c. 15 percent d. 38 percent e. 52 percent