Scott's Painting Company paints houses. Since Scott's business does not have the name recognition of some of the bigger painting companies, Scott advertises a "Five-Year Money Back Guarantee" to indicate to buyers that his service is of high quality. This guarantee is an example of
a. screening.
b. signaling.
c. the seller's curse.
d. the principal-agent problem.
b
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A decrease in ________ increases the money supply since it causes the ________ to rise
A) reserve requirements; monetary base B) reserve requirements; money multiplier C) margin requirements; monetary base D) margin requirements; money multiplier
If the price of land is zero,
a. the supply of land is a horizontal line b. rent is zero and land is a free good c. the MRP curve is positively sloped d. land rents are positive e. demand for land is relatively high
Answer the following statement(s) true (T) or false (F)
1. A budget surplus occurs if the amount of government spending is greater than the amount of tax revenues during a fiscal year. 2. The term "full employment" means that the unemployment rate is equal to zero. 3. Contractionary policies stimulate the economy to grow. 4. If the European economy is booming and US exports increase, aggregate demand (AD) increases. 5. Efficiency wages, a Keynesian theory of unemployment, posits that wages higher than the equilibrium wage are a cause of unemployment.
When all firms choose their best strategy given the strategies that all the other firms have chosen, the result is a Nash equilibrium
a. True b. False Indicate whether the statement is true or false