The most important among the Federal Reserve district banks in conducting monetary policy is the
A. San Francisco bank.
B. Boston bank.
C. Chicago bank.
D. New York bank.
Answer: D
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Consumer surplus is the difference between the minimum amount a person would be willing to pay for a good and the amount the person actually paid
Indicate whether the statement is true or false
In her book on the American work week, economist Juliet Schorr argues that Americans work too much. Her argument may be interpreted as concluding that this behavior
a. increases GDP but decreases well being. b. increases GDP and increases well-being. c. decreases GDP and decreases well being. d. decreases GDP but increases well being.
Make a case for income inequality.
What will be an ideal response?
Suppose that there are two types of cars, good and bad. The qualities of cars are not observable but are known to the sellers. Risk-neutral buyers and sellers have their own valuation of these two types of cars as follows: Types of CarsBuyer's ValuationSeller's ValuationGood (50% probability)5,0004,500Bad (50% probability)3,0002,500Now suppose that sellers value a good car at $4,500 and a bad car at $2,500, and quality is not observed by the buyers. What is the highest price that risk-neutral buyers will offer for a used car if they recognize adverse selection?
A. $4,000 B. $3,000 C. $4,500 D. $2,500