A college requesting applicants to submit their high school transcripts is an example of:
A. signaling.
B. screening.
C. statistical discrimination.
D. building a reputation.
B. screening.
You might also like to view...
Firms entering a perfectly competitive industry will cause the price of the product to
A. fall. B. rise. C. remain constant. D. become more responsive to consumer demand.
Which of the following examples shows an imperfect information problem with monetary policy?
a. After the government sells bonds, many foreign banks increase their interest rates. b. After the government increases spending, business confidence in investing increases. c. The government implements a tax cut after the Fed decreases the money supply. d. The government’s estimate of MPC is 20 percent too low.
The opportunity cost of holding money is
A. the interest income foregone. B. contractionary monetary policy. C. the transactions demand for money. D. the monetary rule.
A star basketball player signs a contract that newspaper reports say is worth $10 million. The player receives $5 million on signing, and $5 million a year for three years. The contract is worth
A) $10 million as reported in the papers. B) less than $10 million since the present value of $5 million received one or more years from now is less than $5 million. C) more than $10 million because the present value of $5 million received one or more years from now is more than $5 million. D) either more or less than $10 million, depending on the value of the discount rate.