An international lender of last resort creates a serious ________ problem because depositors and other creditors of banking institutions expect that they will be protected if a crisis occurs
A) moral hazard
B) adverse selection
C) public choice
D) strategic choice
A
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George is considering investing in a frozen yogurt store. If the store does well he will make $20,0000, but if the store does poorly he will make only $10,000. There is a 50 percent chance of each outcome
His utility of wealth schedule is in the above table. The expected utility of this investment is A) 115. B) 140. C) 165. D) 180.
In which of the following countries are taxes (measured as a percentage of GDP) the lowest?
a. Canada. b. France. c. Sweden. d. The United States.
Why wasn't the stimulus passed in 2009 effective in reducing unemployment during the recession of 2009-10?
A) Congress cut the size of the final package, it was skewed toward tax cuts, and it was only 25% of the amount needed to restore GDP to full employment. B) The administration mismanaged it—and it was much too large. C) Fiscal policy is ineffective in a liquidity trap. D) Tax cuts and interest rate cuts would have been effective, but they were politically undesirable.
The typical firm in many industries has become ________ over the past 100 years, and efficiently organizing production has become ________
A) larger; more difficult B) smaller; more difficult C) larger; easier D) smaller; easier