The main reason the United States established a central bank was
A. a desire for a strong centralized financial authority.
B. to follow the conclusions of economic theory.
C. severe inflation after the Civil War.
D. disastrous experiences with financial panics.
Answer: D
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When the short term adjustment of a nation's price level is sluggish, economists will often discuss the nation's
A) price inertia. B) policy assignment. C) trade restrictions. D) central bank independence.
What is one reason activists might lobby the government for regulation limiting the production of a product to less than would normally be produced in a perfectly competitive market?
A) They value consumer surplus more than producer surplus. B) They value producer surplus more than consumer surplus. C) They seek to avoid future regulation. D) They seek to minimize total surplus.
Which of these statements is generally accepted by economists? Perfect competition
A) provides both equity and efficiency. B) provides equity but not necessarily efficiency. C) provides efficiency but not necessarily equity. D) generally satisfies neither efficiency nor equity.
When bankers make loans they do not have an adverse selection problem
Indicate whether the statement is true or false