The economy of China is in transitioon. What does this mean?
a) investments are determines by state conrtol instead of by private decision
b) The conomy is moving from central planning toward a market-based system
c) Individual firms are in the process of being sold to the state
Ans: b) The conomy is moving from central planning toward a market-based system
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Analysis of adverse selection indicates that financial intermediaries, especially banks
A) have advantages in overcoming the free-rider problem, helping to explain why indirect finance is a more important source of business finance than is direct finance. B) despite their success in overcoming free-rider problems, nevertheless play a minor role in moving funds to corporations. C) provide better-known and larger corporations a higher percentage of their external funds than they do to newer and smaller corporations which rely to a greater extent on the new issues market for funds. D) must buy securities from corporations to diversify the risk that results from holding non-tradable loans.
Despite the fact that most votes have virtually no impact on the outcome of a vote, and knowing people incur opportunity costs to vote, we recognize that people vote for all of the following reasons except they:
A. feel pressure to fulfill their civic duty. B. altruistically decide to contribute to the democratic process by voting. C. get utility from participating in a civic event. D. are obligated legally to do so.
Which of the following most closely resembles a perfectly competitive market?
a. the airline industry b. the soft drink industry c. the wheat market d. long-distance telephone service
Give some possible explanations of the productivity slowdown in the United States that occurred in the 1973-1995 period