Insurance companies practice statistical discrimination because:
A. young males are more likely than other groups to generate insurance claims.
B. insurance markets aren't perfectly competitive.
C. young males are willing to pay more for insurance than other groups.
D. the demand for insurance is very inelastic.
Answer: A
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The fact that there is a market for federal funds enables banks to:
A. hold a lower level of excess reserves than they would otherwise hold. B. hold less in required reserves. C. borrow more from the Fed. D. make fewer loans than they would otherwise.
Domestic producers prefer quotas to tariffs because quotas raise the price of imports and tariffs do not.
Answer the following statement true (T) or false (F)
Figure 6.1In Figure 6.1, the price of the good is $20 and the shaded area represents:
A. producer surplus. B. consumer surplus. C. market equilibrium. D. a price ceiling.
Under the gold standard, an outflow of gold from the United States
A. would increase the U.S. money supply. B. would create a trade deficit. C. would create a trade surplus. D. would decrease the U.S. money supply.