A sudden increase in the demand for newly built homes will
a. decrease the demand for lumber, bricks, and steel.
b. decrease the demand for construction workers and architects.
c. increase the marginal product of workers in the construction industry.
d. increase the demand for construction workers and architects.
D
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Geographic restrictions on banks
A) reduce their ability to take advantage of economies of scale. B) raise the costs of their providing risk-sharing, liquidity, and information services. C) reduce their exposure to credit risk. D) reduce the amount of local lending they undertake.
In the IS model, assuming that the real interest rate does not change, an increase in autonomous net exports causes total investment, planned plus unplanned, to ________
A) fall, then rise back to its initial level B) fall, then rise above its initial level C) rise, then fall back to its initial level D) all of the above E) none of the above
Any increase in efficiency increases only profits of producers, with no increase in output
a. True b. False Indicate whether the statement is true or false
In insurance markets, adverse selection often
A. brings down prices for insurance premiums. B. eliminates exchange possibilities that would be beneficial to both consumers and insurance companies alike. C. creates exchange possibilities that are beneficial to consumers and insurance companies. D. creates an abundance of lawsuits.