Financial instruments with high information costs
A) will usually be more liquid than similar instruments with low information costs.
B) will have lower yields than U.S. Treasury securities.
C) may not be offered for sale in some states.
D) will have lower prices than similar instruments with low information costs.
D
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Adjudication reduces problems created by negative externalities by
A) assigning liability to the party most able to pay (the deep pocket).
B) balancing marginal social benefits against marginal social costs.
C) discovering who has what rights.
D) making more accurate private benefit-cost analyses.
E) measuring externalities more precisely.
Under China's current regime of fixed exchange rates and capital mobility, the main concern is domestic
A. unemployment B. inflation C. depreciation D. liquidation
The actual value of price elasticity of demand
A. is always negative. B. measures the absolute change in quantity demanded when there is a change in price. C. varies with changes in supply. D. will change when the units good is measured in changes.
As the Federal Reserve ________ bonds, interest rates fall and the price of bonds ________
A) sells; rises B) buys; rises C) sells; falls D) buys; falls