Which of the following is an example of screening?
a. A lender checks a loan applicants credit history.
b. When an employee purchases group life insurance without taking a physical exam, she knows more about her health than does the insurance company.
c. When someone is considering buying a used car from a dealership, the seller knows the repair history of the car but the potential buyer does not.
d. All of the above are correct.
a
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Efficient production can be carried out anywhere on or beyond the production possibilities frontier.
Answer the following statement true (T) or false (F)
A flat tax which does allow deductions for investment spending is a type of
A) investment tax. B) excise tax. C) luxury tax. D) consumption tax.
What effect will an increased demand for housing in the suburbs of a major city have on the cost of vegetable farming in the suburbs?
A) No effect, since one cannot grow vegetables on land on which housing has been constructed. B) The cost will decline because only very fertile land will now be used for growing vegetables. C) The cost will rise because it will become more expensive to grow vegetables. D) The cost won't change, because there has been no change in physical conditions. E) We cannot predict unless we know what has happened to the demand for vegetables.
The primary way that banks earn money is:
A. through lending funds and collecting interest on those loans. B. through the accumulation of deposits. C. by lending money to the government. D. by the government paying them to regulate the financial system.