A free market may produce a misallocation of resources over time because
a. the Fed manipulates interest rates.
b. people have a "defective telescopic faculty."
c. private risk usually exceeds social risk.
d. All of the above are correct.
d
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The maximum potential money multiplier is equal to
A) one minus the reserve ratio B) the reserve ratio. C) the inverse of the required reserve ratio. D) the number of dollars on reserve.
________ occurs when one party takes advantage of having more information than another party about the attributes of the good or service they will exchange
A) A negative externality B) Adverse selection C) A transaction cost D) Moral hazard
What potential conflict exists between attracting foreign capital and policies aimed at economic recovery?
What will be an ideal response?
If a profit-maximizing firm is a price taker in the input market but not in the output market, its marginal value product of labor
a. exceeds the marginal revenue product of labor. b. equals its marginal revenue product of labor. c. is less than the marginal revenue product of labor. d. equals the marginal physical product of labor.