A lender who wants to avoid the problem of adverse selection could:
A. charge the same average interest rate to all borrowers.
B. only lend by issuing credit cards.
C. charge a low interest rate and make the applicant prove they warrant the low rate by providing information.
D. charge a very high interest rate and assume all loan applicants are high risk.
Answer: C
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What portion of the engineering and computer-science doctorate degree-holders in the U.S. are foreign-born?
A. About 10% B. About 25% C. About 50% D. About 75%
Suppose you borrow $5,000 at an interest rate of 8%. If the expected real interest rate is 3%, then the rate of inflation over the upcoming year that would be most beneficial to you would be
A) 0%. B) greater than 0% but less than 5%. C) equal to 5%. D) greater than 5%.
As job opportunities for women and the wages those jobs pay have increased, the opportunity cost of doing housework has ________, so many families have chosen to hire specialists in households chores, such as cleaning services and lawn care services,
because the cost of these specialists is ________ than the cost of the wife (or husband) performing those chores. A) increased; higher B) increased; lower C) decreased; higher D) decreased; lower
A firm should hire more labor when the marginal revenue product of labor
A) equals the wage rate. B) exceeds the wage rate. C) is less than the wage rate. D) Any of these can be true. E) None of these are true.