Which of the following is a possible market solution to the lemons problem?
A. Producers might be required to meet certain legal standards to obtain licenses granting the right to sell their products.
B. Government agencies might be charged with directly overseeing production and distribution of certain products.
C. Liability laws might be established to ensure that firms selling certain products must face penalties in the event the products function poorly.
D. Producers might offer product guarantees and warranties.
Answer: D
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When interest rates are artificially lowered through expansionary monetary policy,
A) longer-term investment projects appear to be more profitable. B) production of capital goods increases. C) the economy experiences an unsustainable boom phase. D) the economy will likely fall into a recession in the longer run. E) all of the above tend to occur.
A bank will consider a car loan to a customer ________ and a customer's checking account to be ________
A) a liability; a liability B) an asset; net worth C) a liability; an asset D) an asset; a liability E) an asset; an asset
Unlimited liability applies
a. to partnerships and sole proprietorships b. only to partnerships c. only to sole proprietorships d. only to corporations e. to corporations and partnerships
When Ia > Ii, unwanted inventories
a. fall, causing both employment and national income to rise b. fall, causing both employment and national income to fall c. rise, causing both employment and national income to fall d. rise, causing both employment and national income to rise e. do not change and unemployment and national income do not change