A warranty can help to overcome asymmetric information
Indicate whether the statement is true or false
T A seller's promise to replace a poorly performing product may be enough to win sales.
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An economy produces only 1,000,000 computers valued at $2,000 each. Of these, 200,000 are sold to consumers, 300,000 are sold to businesses, 300,000 are sold to the government, and 100,000 are sold abroad. No computers are imported. At the end of the year, the computer manufacturers hold the unsold computers in inventory. What is the value of GDP?
A. $2.0 billion B. $0.9 billion C. $1.0 billion D. $1.8 billion
One reason for the controversy surrounding the decision by the European Central Bank to buy Greek bonds was that:
A) it may increase moral hazard by encouraging other European governments to issue more debt than private investors were willing to buy B) it may increase adverse selection by encouraging other European governments to issue more debt than private investors were willing to buy C) it may result in higher risk premiums as private investors anticipate a default by Greece D) it may worsen the Greek recession by increasing Greek interest rates
During the first four years of the Great Depression, the price level fell an average of 10 percent per year
a. True b. False
Police protection is a private good
Indicate whether the statement is true or false