A financial crisis occurs when an increase in asymmetric information from a disruption in the financial system
A) causes severe adverse selection and moral hazard problems that make financial markets incapable of channeling funds efficiently.
B) allows for a more efficient use of funds.
C) increases economic activity.
D) reduces uncertainty in the economy and increases market efficiency.
A
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According to liquidity preference theory, as real income increases, so does ________
A) the supply of real money balances B) the demand for real money balances C) the real interest rate D) all of the above E) none of the above
When firms are faced with repeating games, such as the prisoner's dilemma, they:
A. are more likely to collude. B. are less likely to collude. C. will tend to act more like perfectly competitive firms. D. will be more likely to renege on agreements.
In economics, which of the following is considered part of "land"? a. A 500 acre forest
b. bauxite deposits. c. underground pools of crude oil. d. All of the above except a. are included in the category, "land.".
Several studies, some cited in the text, show that the price elasticities of demand for basic foods such as corn, potatoes, and milk are consistently
a. inconsistent over time b. less than one c. greater than one d. equal to one e. highly volatile