The confidence problem of the Bretton Woods systems articulated by Robert Triffin refers to
A) the unwillingness of central banks to accumulate currency for fear of not being able to convert it to gold in case a run on the banks occurs.
B) consumer fear of stock market instability.
C) producer fear of rising wages.
D) the lack of convertibility of gold into silver.
E) low consumer spending because of balance of payment crises.
A
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Which of the following is an example of a trade restriction?
A) Consumers prefer German beer to domestic beer. B) Japan places a tax on all Korean automobiles. C) Domestic wine is more expensive than wine imported from Chile. D) The United States, Canada, and Mexico sign the NAFTA agreement.
After a number of acquisitions, Air American controls 75 percent of the U.S. market. It has been charged with “monopolizing” the U.S. air markets by the Justice Department. In its defense, the airline would want to introduce evidence that
A. cross elasticities for air and rail travel were very high. B. income elasticities for air and rail travel were very high. C. price elasticity for air, rail, and auto travel were negative. D. management always considered the public interest when setting prices.
"The standard of living is too low for many individuals in the United States. The government should implement policies designed to achieve a more equal distribution of income." The preceding statements are
a. positive economic statements based on cause and effect. b. normative economic statements based on value judgments. c. based on the fallacy of composition argument. d. an empirically validated economic principle.
Answer the following questions true (T) or false (F)
1. In a market with positive externalities, the market equilibrium price will be less than the efficient equilibrium price. 2. Health insurance companies impose deductibles on policies and co-payments on claims to reduce the problem of adverse selection. 3. Adverse selection is a situation in which one party to an economic transaction has less information than the other party.