The Personal Consumption Expenditure Index is also known as the GDP deflator
a. True
b. False
Indicate whether the statement is true or false
False
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Collateral requirements lessen the consequences of ________ because the collateral reduces the lender's losses in the case of a loan default and it reduces ________ because the borrower has more to lose from a default
A) adverse selection; moral hazard B) moral hazard; adverse selection C) adverse selection; diversification D) diversification; moral hazard
When manufacturers and distributors establish credible commitments to one another, they often employ
a. vertical requirements contracts b. third-party monitoring c. credible threat mechanisms d. non-price tactics
A decrease in the price of rice from 50 cents to 40 cents a pound increases consumption from 16 to 20 tons a week in Gainesville and from 160 to 200 tons in the larger city of Miami. The elasticity of demand for rice is
a. greater in Miami than in Gainesville, even taking into account the population difference. b. greater in Gainesville than in Miami in spite of the population difference. c. equal in Gainesville and Miami regardless of the population difference. d. impossible to compare because of the population difference.
The market for laundry detergent is monopolistically competitive because products differ by physical characteristics such as scent, stain fighting ingredients, etc.
Answer the following statement true (T) or false (F)