Which of the following is likely to be more of a problem after the introduction of deposit insurance?
A) moral hazard
B) adverse selection
C) contagion
D) bank runs
A
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The substitution effect explains why there is a direct relationship between the price of a product and the quantity of the product demanded
Indicate whether the statement is true or false
There are 10 identical internet service providers (ISPs) in a city serving a market demand with an elasticity of -1.5. The elasticity of supply for each firm is 3.0. The elasticity of demand faced by an individual ISP is
A) -42. B) -15. C) -1.5. D) -27.
In the model of perfect competition, the market demand curve is found by
A) a marketing analysis. B) taking the demand curve of a "representative consumer" and expanding it by the number of consumers of the good. C) horizontally summing the demand curves of individual consumers. D) horizontally summing the supply curves of individual firms.
Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? After the price ceiling becomes effective,
a. a smaller quantity of the good is bought and sold. b. a smaller quantity of the good is demanded. c. a larger quantity of the good is supplied. d. the price rises above the previous equilibrium.