Because of asymmetric information, the failure of one bank can lead to runs on other banks. This is the
A) too-big-to-fail effect.
B) moral hazard problem.
C) adverse selection problem.
D) contagion effect.
D
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The figure above shows the supply curve for soda. The market price is $1.00 per soda. The producer surplus from the 20,000th soda is
A) $0.00. B) $0.50. C) $1.00. D) more than $1.00. E) None of the above answers is correct.
If consumption is given by C = 300 + .6 (Y-T) and I = 300 – 40r, the IS curve is
a. Y = 600 – 2.4T – 40r + G. b. Y = 600 + .6Y -100r – G c. Y = 1500 – 1.5T – 100r + 2.5G d. Y = 1500 + .6T – 100r – G e. none of the above.
The conditions in which vertical relationships can enhance a firm's ability to price discriminate include
a. the manufacturer's product is of value to just one type of customer b. the costs of arbitraging the price differences across markets is large c. the manufacturer acquires the distributer in the lower priced market d. competition provide little ability for the manufacturer has to price above marginal cost
Inflation imposes a cost on society by directly decreasing average real income in the economy
a. True b. False