Which of the following is not an example of a monetary policy tool?
a. the reserve requirement
b. the tax rate
c. open-market operations
d. the discount rate
Ans: b. the tax rate
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Other things constant, countries that invest more will grow
a. more rapidly. b. less rapidly. c. at the same rate. d. at exactly 2% per year.
Pedro, who knows nothing about construction, paid Benito to remodel a room in his house. Two years later, one wall in the remodeled room crumbled because Benito used poor-quality materials. This illustrates which economic problem?
a. adverse selection b. screening c. moral hazard d. signaling
An analysis of the case of Harley-Davidson reveals that the deadweight loss of import protection ___________ the gain in future producer surplus.
a. was slightly less than b. slightly exceeded c. vastly exceeded d. was roughly the same as
Which of the following statements is NOT correct about information?
A. It is always desirable for some people to have more information than others. B. Information plays an important role in how the economy functions. C. Adverse selection will not occur if there is full information given to all market participants. D. Asymmetric information may lead to the disappearance of a market.