The problem of moral hazard has led
A) the governments of many developing countries to guarantee repayment of all loans.
B) to higher growth rates in Latin America.
C) to excessively speculative investment.
D) to both privilege and responsibility of creditors.
E) to stable investments with small and steady expected gains.
C
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A market failure occurs when
A) price equals marginal cost. B) there is a non-optimal allocation that leads to an inefficient market. C) deadweight loss is maximized. D) a firm shuts down.
Last year country A had a nominal GDP of $600 billion, a GDP deflator of 150 and a population of 40 million. Country B had a nominal GDP of $720 billion, a GDP deflator of 120 and a population of 50 million. From these numbers which country is likely to have had the higher standard of living?
a. Country A because it had the higher nominal GDP per person. b. Country B because it had the higher nominal GDP per person. c. Country A because it had the higher real GDP per person. d. Country B because it had the higher real GDP per person.
Which of the following describes the Volcker disinflation most accurately?
a. Almost all of the public believed that the Fed would keep money growth low, so unemployment rose less than it would have otherwise. b. Almost all of the public believed that the Fed would keep money growth low, so unemployment rose more than it would have otherwise. c. Much of the public did not believe that the Fed would keep money growth low, so unemployment rose less than it would have otherwise. d. Much of the public did not believe that the Fed would keep money growth low, so unemployment rose more than it would have otherwise.
Anthony and Kelly decide to watch a movie on Netflix using a promotion code so they do not need to pay for that movie. We know that
A. neither bears an opportunity cost since neither needs to pay for the movie. B. both bear an opportunity cost that depends on what each person is giving up to watch the movie. C. both bear the same opportunity cost because they are seeing the same thing. D. both bear the same opportunity cost because the tickets have the same face value.