The assumption of asymmetric information means that
A) borrowers and lenders have the same information.
B) borrowers and lenders have perfect information.
C) borrowers know more than lenders.
D) lenders know more than borrowers.
C
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Limit pricing in a contestable market sets the price at the highest level that ________
A) maximizes the profit of an entrant B) maximizes the profit of the existing firm C) maximizes the profit of both the existing firm and the entering firm D) inflicts a loss on an entrant
Regarding the stock market crash of 1929, evidence shows that
(a) no one expected trouble in the stock market before the October 1929 crash. (b) there was doubt about the speculative heights of stock prices as they continued to rise and more money continued to pour into the market. (c) only active support by the New York Federal Reserve Bank during the summer and fall of 1929 enabled the bull market to last until October. (d) investment trusts and nonbanking money sources correctly anticipated the downturn.
A requirement that buyers of one service also purchase another service from the same seller is called
a. exclusive dealing b. an interlocking merger c. a second good contract d. a tying contract e. a legal agreement
Unemployment insurance could affect unemployment by:
A. increasing the equilibrium level of unemployment. B. decreasing the amount of frictional unemployment. C. changing the incentives of those unemployed and looking for work. D. All of these are true.