Refer to the information provided in Figure 3.13 below to answer the question(s) that follow.
Figure 3.13Refer to Figure 3.13. An increase in the number of cattle ranchers will cause a movement from
A. Point B to Point A.
B. D2 to D1.
C. S2 to S1.
D. Point G to Point F.
Answer: C
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If the economy was about to enter an inflationary boom, which of the following would be the most appropriate policy?
a. A tax increase. b. A decrease in government spending. c. An increase in government spending. d. A tax decrease.
It is costly to purchase a new car every two or three years because
A) the financing cost is significantly higher for a new car than for a used one. B) the gasoline tax for the fuel of a new car is generally higher than for a used one. C) the maintenance cost of a new car is generally higher than for a used one. D) a new car will depreciate rapidly in value during the first few years of use.
A primary goal of the International Monetary Fund (IMF) is to:
A. protect the interests of the United States abroad. B. negotiate trade agreements between nations. C. promote economic negotiations and cooperation among industrialized countries. D. work out repayment plans for developing countries with large international debts.
The difference between adverse selection and moral hazard is that
A) moral hazard happens at the time parties enter into a transaction; adverse selection occurs after the transaction takes place. B) moral hazard is the motive that is behind one party entering into a transaction with another party. Adverse selection refers to the other party being harmed by the transaction. C) moral hazard refers to the likelihood that a transaction will lead one party to be better off at the expense of the other party to the transaction. Adverse selection refers to the consequences of the transaction after it has occurred. D) adverse selection happens at the time parties enter into a transaction; moral hazard occurs after the transaction takes place.