Refer to Figure 2-1. ________ is (are) inefficient in that not all resources are being used
A) Point A B) Point B C) Point C D) Points A and C
A
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The used car market has a significant amount of adverse selection because
A) the seller knows more about the car than the buyer. B) the buyer can easily find out more about the car than the seller. C) buyers and sellers rarely have enough information. D) the transaction costs of the used car market are prohibitive.
If the consumption function is C = 120 +_.8(Y-T) in the basic Keynesian model, then in the government spending multiplier is:
a. 5. b. 4. c. 1.25. d. .8
If information is asymmetric, explain why the hire contract is not efficient in production and a moral hazard exists, but the fixed fee to the principal contract is efficient and does not pose a moral hazard problem
What will be an ideal response?
If the Congress passes legislation to cut taxes to counter the effects of a severe recession, then this would be an example of a(n):
A. nondiscretionary fiscal policy. B. political business cycle. C. contractionary fiscal policy. D. expansionary fiscal policy.