The government can help solve the information asymmetry problem by:
A. providing the missing information to the less-informed party.
B. finding ways to make the same amount of information known to both parties.
C. requiring the more informed party to reveal the missing information.
D. All of these statements are true.
Answer: D
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Suppose Spam is an inferior good. If the U.S. economy is growing strong, and demanders' incomes were to rise, which of the following would tend to occur?
A) Spam sales would increase. B) Spam demand would decrease. C) The price of Spam would increase. D) Both A and C above. E) Both B and C above.
In face of a negative supply shock, the Fed may avoid a rise in unemployment only if it is willing to increase the rate of inflation
Indicate whether the statement is true or false
If, at the end of the project life, a piece of equipment having a book value of $4,000 is expected to bring $3,000 upon resale, and the income tax rate is 40%, how much will be the cash flow?
A) $2,800 B) $3,000 C) $3,400 D) $4,000
The trade in goods, services, and capital around the world comprises:
A. trillions of dollars. B. billions of dollars. C. a small amount in dollar value. D. millions of dollars.