The federal funds rate is determined in a market and targeted by the Fed
a. True
b. False
A
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In a market with an external cost, government action
A) cannot decrease the amount of the deadweight loss from the external cost. B) can sometimes help to achieve an efficient outcome. C) cannot alter firms' cost curves. D) Both answers A and C are correct. E) Both answers B and C are correct.
Every society faces economic trade-offs. This means
A) not everyone can have enough goods to survive. B) some people live better than others do. C) society's output cannot be made available to all. D) producing more of one good means less of another good can be produced.
The risk that a borrower has a greater understanding about their potential future behavior than a potential lender is known as ________
A) the problem of adverse selection B) the problem of moral hazard C) ornamental torsion D) the asymmetric innovation problem
Variance is a measure of ________ and the lower the variance, ________
A) expected profit; the lower the profit B) risk; the lower the risk C) standard deviation; lower the standard deviation D) risk; the greater the risk