A clause in a loan contract disallowing the borrower from acquiring other companies during the term of the loan is an example of a
A) guarantee.
B) collateral agreement.
C) restrictive covenant.
D) moral hazard.
C
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Underproduction compared to the efficient amount implies that for the last unit produced
A) marginal social benefit exceeds marginal social cost. B) marginal social benefit equals marginal social cost. C) marginal social cost exceeds marginal social benefit. D) the deadweight loss is zero.
Under fixed exchange rate, in general
A) the domestic and foreign interest rates are equal, R = R . B) R = R + (Ee - E)/E. C) the foreign and domestic interest rates are unequal. D) the expected rate of domestic currency depreciation is high. E) the expected rate of currency depreciation is one.
If an increase in the level of the money supply results in a proportionate increase in prices with no effect on any real variables, we say that
A) the Fisher relationship holds. B) money is neutral. C) money is superneutral. D) money is the most preferred store of value.
Playing the equilibrium of a one-stage game over and over again when the one-stage game is repeated is:
B. only a Nash equilibrium if the game is finite. C. only a Nash equilibrium if the game is infinite. D. dominated in some cases.