Asset inflation has a danger of:
A. reducing the productive capacity of assets.
B. leading to a misallocation of resources to risky investments.
C. accommodating contractionary monetary policy.
D. obscuring goods inflation.
Answer: B
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Gary usually does not donate for charity. However, he donated money for an environmental awareness campaign launched by his friend. This is an example of ________
A) rationalism B) pure altruism C) impure altruism D) liberalism
A transaction between A and B benefits both parties by 50, but imposes a cost on C of 20. C has the right to prevent the transaction. A "coordination failure" in this situation
A) is the cost imposed on C. B) is the ability of C to prevent a transaction that still has a net overall gain of 80. C) would occur if A and B do not compensate C by 20 or more to allow the transaction. D) is that the cost to C is not 100.
Central banks can increase the money supply by:
a. Making discount loans. b. Selling government securities. c. Selling foreign exchange. d. Raising margin requirements. e. All of the above.
What point on the graph represents maximum consumer confidence?
a. A
b. B
c. C0
d. D