In order to reduce the possibility of adverse selection, banks should raise the interest rates charged on loans
a. True
b. False
Indicate whether the statement is true or false
False
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Laws that are passed that either require or forbid certain behaviors are examples of command-and-control policies
a. True b. False Indicate whether the statement is true or false
Which of the following will cause aggregate private spending to decrease?
A) a reduction in government spending B) an increase in expected future interest rates C) an increase in expected future taxes D) all of the above E) none of the above
The use of pollution charges to reduce pollution confronts the problem of
a. free riders who avoid revealing benefits from abatement. b. determining specific individual damages and appropriate charges associated with pollutants. c. necessarily lowering the price of the products. d. requiring no agency to administer the tax.
If consumers would be willing to purchase the same quantity of a good no matter what its price was, the demand curve would
a. be a vertical line, and demand would be perfectly inelastic. b. be a horizontal line, and the demand would be perfectly elastic. c. not exist. d. be identical to the supply curve for the good.