Two people are involved in a borrower/lender situation, and one person has superior knowledge of its own current and future prospects over the other person. This is known as
A. deceptive knowledge.
B. symmetric information.
C. preventable information.
D. asymmetric information.
Answer: D
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In the United States, corporate profits are taxed
A) at both the corporate level and when investors receive dividends. B) only when investors receive dividends. C) only at the corporate level. D) neither at the corporate level nor when investors receive dividends.
The kind of assets banks can hold as reserves are also called the economy's
A) checkable deposits. B) money market funds. C) high-powered money. D) bankers' acceptances.
If supply is upward-sloping and demand is downward sloping, what happens to the equilibrium real risk-free interest rate and quantity of real loanable funds per time period if there is an increase in the real saving and a decline in business investment?
a. The real risk-free interest rate falls and the quantity per time period rises. b. The real risk-free interest rate falls and the quantity per time period is uncertain. c. The real risk-free interest rate does not change and the quantity per time period rises. d. The real risk-free interest rate is uncertain and the quantity per time period rises. e. The real risk-free interest rate is uncertain and the quantity per time period is uncertain.
A consequence of a negative externality is that social costs __________ private costs, and the efficient level of output __________
A) equal; does not require any type of government intervention B) are less than; requires the government to create a subsidy C) are greater than; requires the government to impose a tax D) are greater than; requires the government to create a subsidy E) are less than; requires the government to impose a tax