When bad drivers line up to purchase collision insurance, automobile insurers are subject to the
A) moral hazard problem.
B) adverse selection problem.
C) assigned risk problem.
D) ill queue problem.
B
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Fiscal policy is sometimes initiated on the advice of the
A. Congressional Budget Office. B. Federal Reserve Board. C. Joint Economic Committee. D. Council of Economic Advisers.
Which of the following is an implicit cost of production?
A) interest paid on a loan to a bank B) wages paid to labor plus the cost of carrying benefits for workers C) rent that could have been earned on a building owned and used by the firm D) the utility bill paid to water, electricity, and natural gas companies
If the bank of Waterloo receives a $10,000 deposit and the reserve requirement is 10 percent, how much can the bank loan out? (Assume that before the deposit this bank is just meeting its legal reserve requirement.)
A) $1,000 B) $9,000 C) $10,000 D) $11,000
If the LM curve is vertical, then
A) there is partial "crowding out" of an increase in government expenditures. B) the increase in the money supply will have no impact on the level of real GNP. C) the demand for money is highly sensitive to the interest rate. D) the velocity of money is constant.