A contestable market is a market in which there are one or a few firms and entry into the market is not costly
Indicate whether the statement is true or false
TRUE
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Two reasons savers keep deposits at banks are to:
A. lower interest rates and to increase the money supply. B. equalize loan supply and demand and to earn interest. C. earn a return on their savings and to facilitate making payments. D. secure mortgages and to purchase stocks.
Which of the following describes a moral hazard problem?
A) a process by which individuals have substantial resources devoted to the exchange process and need to make a profit or they will be adversely affected B) a process by which individual buyers or sellers with better information are more likely to participate in voluntary exchange C) a contractual problem that results because monopolies exist in all economies D) a post-contractual problem that may result because participants to the exchange process have information that allows them to act in an opportunistic manner
Explain why baseball ticket prices may increase when a team pays a new player a large salary, but will remain unchanged when a current player gets a salary increase
What will be an ideal response?
The national debt
A. Equals the dollar amount of outstanding U.S. Treasury bonds. B. Will be paid off when the budget is finally balanced. C. Is paid off each fiscal year when the debt is refinanced. D. Will never be paid off in any given year, but it will be entirely paid off when it is refinanced over a number of years.