Figure 10-8
Figure 10-8 illustrates a period of
a.
low unemployment and high inflation.
b.
low unemployment and low inflation.
c.
high unemployment and high inflation.
d.
high unemployment and low inflation.
c
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If the amount you owe on your house is less than the price of the house, you have
A) positive equity in your house. B) an adjustable-rate mortgage on your house. C) a reverse mortgage on your house. D) negative equity in your house.
Which of the following is an application of the moral-hazard problem?
a. a person buying insurance after a cancer diagnosis. b. an salesperson who is not paid on commission being rude to customers. c. coffee hounds buying the menu item meant for lower-demand consumers. d. only inexperienced workers applying for a managerial job advertised with a relatively low salary.
Interest earned on personal savings accounts is currently subject to taxation. What may happen to economic growth in the United States if Congress passes legislation exempting this interest from taxation?
If, at some interest rate, the quantity of money demanded is less than the quantity of money supplied, people will desire to
a. sell interest-bearing assets, causing the interest rate to decrease. b. sell interest-bearing assets, causing the interest rate to increase. c. buy interest-bearing assets, causing the interest rate to decrease. d. buy interest-bearing assets, causing the interest rate to increase.