If the discount rate is lowered further below the market interest rate, banks tend to
A) lend more to the Fed.
B) lend less to the Fed.
C) borrow more from the Fed.
D) borrow less from the Fed.
C
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Adverse selection:
A. is about actions and occurs after the parties have voluntarily entered into an agreement. B. is always present when moral hazard arises. C. relates to unobserved characteristics of people or goods and occurs before the parties have entered into an agreement. D. All of these statements are true.
A market tends to be monopolistic if
a. The good has too many substitutes b. The good has very few substitutes c. The good has too many complements d. The good has very few complements
Based on the graph showing diminishing marginal utility of income, which action would cause the greatest loss in utility?
a. taking $30,000 from high earners
b. taking $30,000 from low earners
c. giving $30,000 to high earners
d. giving $30,000 to low earners
An increase in the nominal interest rate, other things constant, will _____
Fill in the blank(s) with the appropriate word(s).