Precontractual informational asymmetries that generate contracting costs can lead to
A. bargaining failures and adverse selection.
B. perquisite taking and differential risk exposure.
C. implicit contracts and reputational concerns.
D. explicit contracts and credibility issues.
Answer: A
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Why does the money supply increase when the Fed buys a bond but does not change when a business buys a bond?
What will be an ideal response?
Assuming MPC = 0.5, a $2,000 decrease in intended investment will shift the aggregate expenditure curve down by
a. $2,000 and will decrease the equilibrium level of national income by $2,000 b. $2,000 and will decrease the equilibrium level of national income by less than $2,000 c. $2,000 and will decrease the equilibrium level of national income by more than $2,000 d. more than $2,000 and will decrease the equilibrium level of national income by more than $2,000 e. less than $2,000 and will decrease the equilibrium level of national income by less than $2,000
If the cross-price elasticity between goods X and Y is zero, we know the goods are:
A. independent. B. substitutes. C. inelastic. D. complements.
The marginal cost curve crosses
a. only the average variable cost curve at its bottom. b. both the average cost curve and the average variable cost curve at their bottoms. c. only the average cost curve at its bottom. d. the marginal product curve at its maximum.