Adverse selection occurs in the used car market because:
A. the seller has more information than the buyer.
B. the buyer has more information than the seller.
C. both the buyer and the seller have incomplete information.
D. Any of these could be the cause of adverse selection in the used car market.
A. the seller has more information than the buyer.
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Equilibrium in the foreign exchange market implies equilibrium in the balance of payments
Indicate whether the statement is true or false
Monopolization of the labor market restricts output because
A) fewer workers offer their services. B) the higher wage raises the firm's marginal cost. C) monopolized workers are less productive. D) a monopolized labor market means there is also a monopolized output market.
What happens when the price level falls?
A) Total planned real spending remains constant. B) Total planned real spending increases. C) Total planned real spending also falls. D) Planned real spending on goods increases but planned real spending on services falls.
Assuming the economy is in a recession, Keynesian economists predict that: a. wages will remain fixed
b. monetary policy will sell government securities. c. higher wages will shift the short-run aggregate supply curve leftward. d. lower wages will shift the short-run aggregate supply curve rightward.