One result of asymmetric information about people's ability to repay a loan is that:
A. loans will only be made to people who don't pay them back.
B. a bank could make many loans to people who don't pay them back.
C. lenders are better off than with perfect information.
D. banks will not make loans.
Answer: B
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Expansionary fiscal policy includes an increase in government spending, a decrease in taxes or some combination of the two
Indicate whether the statement is true or false
The fact that there are fewer and fewer potential investments that will generate returns high enough to make the cost of paying back a loan worthwhile is reflected in the:
A. upward-slope of the supply curve in the market for loanable funds. B. downward-slope of the supply curve in the market for loanable funds. C. upward-slope of the demand curve in the market for loanable funds. D. downward-slope of the demand curve in the market for loanable funds.
Monetarists believe that velocity
A) is constant. B) changes erratically. C) and the money supply always have an inverse relationship. D) changes in a way that can be understood and predicted.
If the price level doubled in a 23-year period, we can conclude that the average annual rate of inflation over that period was about 3 percent.
Answer the following statement true (T) or false (F)