The company that manufactures Screaming Chocolate Zonkers breakfast cereal finds that its sales collapse, it is forced into bankruptcy, and it defaults on its bonds, as a result of information on the filthy conditions in its factory, which had long
been known to management, leaking out to the general public. This incident is best thought of as an example of A) symmetric information in the financial markets.
B) asymmetric information in the financial markets.
C) moral hazard in the financial markets.
D) the generally poor state of sanitation in the food-processing industry in the United States.
B
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Value added is equal to the value of a firm's production minus
A) all of its costs of production. B) labor costs. C) investment expenditures. D) intermediate goods used in production.
If an employment situation is characterized by adverse selection, there is an excess supply of underqualified applicants for each job
a. True b. False
Which of the following examples would cause the most serious unemployment?
a. The minimum wage is increased by 50 percent. b. The minimum wage is increased by 10 percent. c. The minimum wage is decreased by 50 percent. d. The minimum wage is decreased by 10 percent.
Suppose the United States is experiencing a balance of payments surplus. To prevent the exchange rate from appreciating, the U.S. Treasury must
A) sell dollars and buy foreign currency. B) sell both dollars and foreign currency. C) buy both dollars and foreign currency. D) sell foreign currency and buy dollars.