The substantial risks taken by financial intermediaries like Sallie Mae because they are effectively insured are examples of what economists refer to as:
a. sub-prime behavior
b. asymmetric information.
c. moral hazard.
d. countercyclical policy.
c
You might also like to view...
Official unemployment rate statistics may
A. understate the amount of unemployment by excluding part-time workers in the calculations. B. overstate the amount of unemployment by including part-time workers in the calculations. C. overstate the amount of unemployment because of the presence of "discouraged" workers who are not actively seeking employment. D. understate the amount of unemployment because of the presence of "discouraged" workers who are not actively seeking employment.
If the marginal propensity to consume (MPC) is 0.75 and there is an increase in planned investment spending of $0.5 trillion, then saving will
A) increase by $0.25 trillion. B) increase by $0.5 trillion. C) increase by $1 trillion. D) remain unchanged.
Why might most people, as in the United States, save less than is good for themselves and for the economy as a whole? How might policymakers encourage more saving?
What will be an ideal response?
The three components of consumption are durable goods, nondurable goods, and housing construction
Indicate whether the statement is true or false