Informational asymmetry may apply to a hidden action or hidden characteristic where the informed party may be reluctant to reveal relevant information
a. True
b. False
Indicate whether the statement is true or false
True
You might also like to view...
Recall the Application. When applying the Taylor Rule to the decade of 2000, economist John Taylor found that past experience showed that from 2001 to 2004, the Fed should have ________ interest rates instead of ________ interest rates
A) raised; not changing B) not changed; lowering C) lowered; raising D) raised; lowering
The fiscal and monetary policy alternative to fine-tuning is
A) abandonment of both fiscal and monetary policy. B) abandonment of fiscal policy in favor of exclusive reliance on monetary policy. C) budgets established for the long term and a steady growth rate for the money stock. D) price and wage controls. E) redistribution of income in favor of those with a higher propensity to spend.
When someone's willingness to pay is the same as the actual price paid for an item:
A. the individual's surplus is zero. B. the individual will not purchase the item. C. surplus cannot be maximized. D. All of these are true.
Which of the following markets comes closes to the model of perfect competition?
A) automobile industry B) information technology industry C) aerospace industry D) agriculture