Subprime lending gained popularity because of all of the following, except:
A. investing in a home was seen as the safest investment one could make.
B. it was meant to encourage those with risky credit to make a safe investment.
C. the value of homes had not fallen for over 60 years.
D. helping poor to own a home.
D. helping poor to own a home.
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Which of the following is the most important source of revenue for the federal budget?
A. The corporate income tax. B. Social Security and unemployment taxes. C. The federal personal income tax. D. Sales tax.
When a per-unit tax is levied on a goods market in which supply is not perfectly inelastic but such a tax nevertheless does not give rise to any deadweight loss, consumers are made no worse off by the imposition of the tax.
Answer the following statement true (T) or false (F)
One way to solve the problems caused by information asymmetry is:
A. building a reputation. B. signaling. C. screening. D. All of these are solutions to information asymmetry.
When producers price their items, they should realize there will usually be a consumer surplus when the items are sold. What does this mean to them?
a. They should price items one dollar above the market equilibrium price. b. They should price items somewhat higher than what consumers are willing to pay for them. c. They should price items exactly at what consumers are willing to pay for them. d. They should price items somewhat lower than what consumers are willing to pay for them.