the multiplier effect does not occur when autonomous expenditure decreases
a. true
b. false
b. false
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What is an externality?
What will be an ideal response?
Which of the following explains why mortgages weren't considered securities prior to 1970?
A) The Federal Reserve Act of 1913 prohibited mortgages from being considered securities. An amendment to the Act was approved in 1970 that allowed mortgages to be considered securities. B) Prior to 1970, mortgages were rarely resold in the secondary market. C) Until 1970, the average annual increase in housing prices did not allow the buying and selling of mortgages to be profitable. There has been a significant annual increase in housing prices and mortgage values since 1970. D) Congress passed a law in 1970 stipulating that mortgages could be classified as securities.
You may be unwilling to buy a used car because you suspect the last owner found out the car was a lemon. You may treat a car you rented with a little less care than you would use on your own car
a. Both examples primarily illustrate adverse selection. b. Both examples primarily illustrate moral hazard. c. The first example primarily illustrates adverse selection; the second primarily illustrates moral hazard. d. The first example primarily illustrates moral hazard; the second primarily illustrates adverse selection.
Outsourcing leads to
A. Increases in total output, but with permanent job losses for some domestic workers. B. Decreases in total output, along with permanent job losses for some domestic workers. C. Decreases in total output, but with no changes in the number of domestic jobs available. D. Increases in total output, but with temporary job losses for some domestic workers.