Mom's Bakery goes out of business due to decreasing sales resulting from the dramatic increase in people on low carbohydrate diets. The decrease in business also results in Mom's defaulting on the loan they have with the bank. This is an example of:

A. symmetric information in financial markets.
B. asymmetric information in financial markets.
C. lack of perfect information in financial markets.
D. moral hazard in financial markets.


Answer: C

Economics

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Economics

Nominal gross private domestic investment was $1888.0 billion in 2008 and rose to $2057.4 billion in 2009. The chain-weight price index for gross private domestic investment was 106.6 for 2008 and 110.3 for 2009, where 2005 was the base year

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Economics

Which of the following helps economists avoid double counting in computing of GDP?

a. Including goods and services produced only within a given area. b. Only include transfer payments made by the government and not individuals. c. Only include capital purchases by corporations and not by family-owned firms. d. Avoiding the use of intermediate goods in calculating GDP.

Economics

Which of the following is not correct?

a. When a union is present in a labor market, wages are not determined by the equilibrium of supply and demand. b. Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint market power. c. The process by which unions and firms agree on the terms of employment is called a strike. d. Most workers in the U.S. economy are not members of a union.

Economics