Deflation can cause widespread bank crises for all of the following reasons except:
A. information asymmetry problems decrease during deflationary periods.
B. borrowers' default rates increase.
C. bank balance sheets deteriorate as the level of economic activity decreases.
D. a decline in the value of borrowers' net worth but not their liabilities.
Answer: A
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Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right, but the supply curve shifts more than the demand curve. As a result,
A) both the equilibrium price and quantity of DVD players will decrease. B) the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease. C) the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will increase. D) the equilibrium price of DVD players will decrease; the equilibrium quantity will increase.
If you and your friends are still looking for a job eighteen months after graduation, even after lowering your expectations, you're probably living in the business cycle phase of a
a. recession b. peak c. boom d. recovery e. prosperity
Based on the graph for the Gini Coefficient, a point where the x and y coefficients are equal would represent ______.
a. total income inequality
b. perfect income equality
c. moderate income inequality
d. moderate income equality
The official mission of the World Bank is to
A. establish exchange rates between the currencies of member nations. B. provide funding for needed development projects that would have difficulty attracting private investment. C. advise member nations on the appropriate levels of taxation. D. fight global inflation.