If banks face a problem in loan markets when bad credit risks are the ones most likely to seek bank loans, it is described as
A) moral hazard.
B) moral suasion.
C) adverse selection.
D) fraud.
C
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Use the following graph for a competitive market to answer the question below.
Assume the government imposes a $3 tax on buyers, which results in a shift of the demand curve from D1 to D2. The price the seller receives for the product after the tax is imposed on the buyer is
A. $7. B. $5. C. $8. D. $3.
If the real interest rate
A) falls, there is a movement along the supply curve of loanable funds to a lower quantity of loanable funds . B) rises, the supply of loanable funds curve shifts leftward. C) rises, the supply of loanable funds curve shifts rightward. D) falls, there is a movement along the supply of loanable funds curve to a higher quantity of saving. E) falls, the supply of loanable funds curve shifts leftward.
Which of the following statements is false?
A. The issuer of a bond is a borrower. B. The person who buys a bond is a lender. C. Interest earned on corporate bonds is exempt from federal income taxes. D. The coupon rate on a bond is the percentage of the face value that the bondholder receives annually until the bond matures.
For a normal good, the income elasticity of demand is:
A) positive or negative depending on the share of income accounted for by the good. B) always equal to 1. C) positive if income increases and negative when income declines. D) always positive.