Signals can help prevent adverse selection as long as a false signal is costly to the person sending it
What will be an ideal response?
True. If false signals can be made at little cost to the perpetrator, the signals are meaningless. Signals are believed only when they are credible.
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To reduce economic volatility the Fed should push the economy toward a
A) positive output ratio. B) negative output ratio. C) zero output ratio. D) All of the above are consistent with reduced volatility.
Use the following list of modern macroeconomic theories in order to describe the following statement: Lower tax rates and less government intervention in the private economy is the only way to stimulate saving, investment, and productivity.
A. Monetarism B. The theory of rational expectations C. New classical economics D. Supply-side economics
In the figure above, the richest 20 percent of all households receive what share of all income?
A) 10 percent B) 20 percent C) 30 percent D) 40 percent
In recent years, wireless cellular telephones have been replacing land-line phone service. This is an example of
a. economies of scale. b. division of labor. c. creative destruction. d. entry barriers into a market.