The evidence from banking crises in other countries indicates that
A) deposit insurance is to blame in each country.
B) a government safety net for depositors need not increase moral hazard.
C) regulatory forbearance never leads to problems.
D) deregulation combined with poor regulatory supervision raises moral hazard incentives.
D
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According to the graph shown, if the price were $15, a:
A. shortage would exist, signaling sellers to raise their price.
B. shortage would exist, signaling buyers to leave the market.
C. surplus would exist, signaling sellers to drop their price.
D. surplus would exist, signaling buyers to bid up the price.
AACSB: Analytical Thinking
Inflation that occurs when total spending is greater than the economy's ability to produce output at the existing price level is:
a. Unanticipated inflation b. Cost-push inflation c. Anticipated inflation d. Demand-pull inflation
Consumption is most likely to respond one-for-one with changes in current income when
A) the change in current income results from a one-time bonus. B) people believe the change in their current income is temporary. C) people are able to borrow as much as they wish, as long as they pay it back. D) the change in current income is caused by the business cycle. E) none of the above
Which of the following statements is consistent with a decrease in supply?
A) Prices of raw material inputs have increased. B) There has been an advance in technology. C) Consumers' incomes have increased. D) The market price has decreased.