The existence of a lender of last resort creates moral hazard for bank managers because:
A. they have an incentive to take too much risk in their operations.
B. they are less likely to apply for a direct loan from the central bank.
C. officials are likely to undervalue the bank's portfolio of assets.
D. banks seek loans from the central bank only after exploring other options.
Answer: A
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The production of a good or service by an authority that receives the most of its revenue from the government is referred to as
A) public provision. B) private subsidies. C) vouchers. D) copyrights. E) Coasian production.
Which of the following is likely to cause a decrease in the wage rate and an increase in the employment level of a country?
A) A left shift in the demand curve for labor, without any change in the supply curve for labor B) A left shift in the supply curve for labor, without any change in the demand curve for labor C) A right shift in the supply curve for labor, without any change in the demand curve for labor D) A right shift in the demand curve for labor, without any change in the supply curve for labor
Define the terms "production" and "production function." Differentiate between the short run and the long run based on the usage of inputs by a firm
What will be an ideal response?
Refer to the graph shown, which shows the demand and supply for a new vaccine against the common cold. Suppose once vaccinated, a person cannot catch a cold or give a cold to someone else. At the competitively determined output level, the marginal social benefit will be:
A. less than P0. B. equal to P0. C. greater than P0. D. greater than or less than P0 depending on the income elasticity of demand and the effectiveness of the vaccine.