Contagion is:
A. the rapid contraction of investment spending that occurs when interest rates are increased by the Federal Reserve.
B. the rapid inflation that results from the printing of money.
C. the failure of one bank spreading to other banks through depositors withdrawing of funds.
D. the phenomenon that if one bank loan defaults it will cause other bank loans to default.
Answer: C
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Danny has $12 to spend on two goods: pies and soda. The price of a pie is $4, and the price of a can of soda is $2. To maximize his utility, Danny buys ________
A) the combination that gives him equal total utility from pies and soda B) 2 pies and 2 cans of soda C) only sodas because they are less expensive D) the combination that gives him the same marginal utility per dollar spent on pies as on soda
Data on productivity gains in the 1990s in the United States strongly suggest that a significant share of those gains was attributable to:
A) improvements in education and training. B) improvements in information technology. C) substantial reductions in labor costs. D) increased demand for goods and services.
The principle of comparative advantage implies that
A) only wealthy countries ultimately can benefit from international trade. B) every country can benefit from international trade. C) we should limit the extent to which people specialize. D) most people are harmed by trade.
Assume some gain and some lose as the result of a change. If we can demonstrate the value of the gains are less than the value of the losses, then we say the change is
A. potentially efficient. B. technically efficient. C. unequivocally Pareto optimal. D. inefficient.