If consumers are very foresighted, we would expect actual consumption spending to
A) increase during recessions.
B) increase during episodes of stagflation.
C) have no relation to wealth.
D) resemble a "random walk."
E) be entirely predictable.
D
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The risk that the party on the other side of a financial transaction fails to meet its obligation is called
A) credit risk. B) currency risk. C) counterparty risk. D) leverage.
Of the three primary tax sources of revenue for the U.S. federal government, which of the following has trended upward as a percentage of GDP since 1962?
A) corporate income taxes B) social insurance taxes C) sales and excise taxes D) individual income taxes
Which of the following is not an example of research and development?
A. Government funding of new public transportation technologies B. General Motors funding a study of new internal combustion technology C. Government funding to elementary and middle schools D. Government funding to a biochemistry professor for the study of new pharmaceutical therapies
What is adverse selection? Give an example and explain why it is a problem
What will be an ideal response?