The following is an example of adverse selection
a. A majority of those applying for well paid jobs are well qualified
b. More reckless drivers opt for cars with fewer safety devices
c. Individuals living in less secure neighborhoods want to buy less insurance
d. Individuals with a strong family history of heart diseases opt to buy more insurance
d
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A lesson of the Enron collapse is that government regulation
A) always fails. B) can reduce but not eliminate asymmetric information. C) increases the problem of asymmetric information. D) should be reduced.
Empirical evidence indicates that money demand is determined by
A) interest rates and the level of GDP. B) the inflation rate and the unemployment rate. C) interest rates and the money supply. D) the money supply and the level of GDP.
Best Lights and Bright Lights are two light bulb suppliers that are competing with each other. If Best Lights announces an upcoming price change next month, it may be signaling to Bright Lights its intent to engage in ________.
A) tacit collusion B) a Stackelberg oligopoly C) a Cournot oligopoly D) a Chamberlin oligopoly
The money supply known as M3
a. does not include credit union accounts b. excludes certificates of deposit c. includes M2 + large denomination time deposits and repurchase agreements d. excludes travelers' checks e. does not include demand deposits