In the bond market, the assigning of a risk premium is a tool designed to address the problem of:
A. information asymmetry.
B. moral hazard.
C. adverse selection.
D. the free-rider.
Answer: C
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Economists have determined that there are four factors that seem to strongly affect a nation's rate of economic development. Which is NOT one of these four factors?
A) supporting current industries and the jobs they provide instead of adopting new technology that brings disruptive social changes B) developing an educated population C) establishing a system of property rights D) limiting the extent to which the government imposes trade barriers
Suppose the country of Tiny Town experienced frictional unemployment. This frictional unemployment would
A) definitely signal that the country is in a recession. B) be considered a natural occurrence in a growing economy. C) signal that there are more job leavers than job losers. D) signal that the number of discouraged workers is growing.
Which of the following statements applies to a monopolist but not to a perfectly competitive firm at their profit-maximizing outputs?
A) Average revenue equals average cost. B) Marginal revenue is less than price. C) Price equals marginal cost. D) Marginal revenue equals marginal cost.
Refer to Table 19-1. Suppose that a simple economy produces only four goods and services: sweatshirts, dental examinations, coffee drinks, and coffee beans. Assume all of the coffee beans are used in the production of the coffee drinks. Using the information in the above table, nominal GDP for this simple economy equals
A) 3,090 units. B) $7,250. C) $8,750. D) $9,750.