If depository insurance exists, bank managers may make riskier loans than they would have otherwise, which is an example of
A. moral hazard.
B. regulatory lag.
C. adverse selection.
D. irrational behavior.
Answer: A
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Commercial paper has a maximum maturity of
A) one day. B) seven days. C) 30 days. D) 270 days.
Clarence is a Japanese citizen working for Toyota at the manufacturing plant located in Tennessee. Clarence's work will contribute toward:
A. U.S. GDP since the location of the plant is in the U.S. B. Japan's GDP since he's a Japanese citizen. C. Japan's GDP since it's a Japanese firm. D. both the U.S. and Japan's GDP.
Which of the following statements concerning efficiency is correct?
a. If a toll road is heavily used so that traffic movement is slowed, the price per vehicle should be reduced since the road is generating more revenue. b. Economists advocate high prices for abundant resources and low prices for scarce resources. c. If a toll road is heavily used and traffic movement is difficult, the price per vehicle should be increased to shift some traffic to less-crowded roads. d. None of the above is desirable in promoting efficient use of scarce road space.
Figure 11-5
In Figure 11-5, Crown Theater, a monopolist movie theater, has chosen the profit-maximizing output. At this output level, what is total cost for the firm?
A. $750 B. $600 C. $450 D. $300