Information asymmetry is not a problem when:
A. both parties lack the same information.
B. the wants of both parties are opposed to one another.
C. the wants of both parties are aligned with one another.
D. the constraints of both parties are identical.
Answer: C
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The quantity theory of money is a theory of how
A) the money supply is determined. B) interest rates are determined. C) the nominal value of aggregate income is determined. D) the real value of aggregate income is determined.
Bonds are preferred to stock by individual investors who
a. need to have immediate access to their money b. don't think the business is profitable c. prefer a guaranteed lower return to a risky higher return d. prefer a risky higher return to a guaranteed lower return e. prefer dividends to interest payments
Which of the following examples would most likely be an unintended consequence of minimum wage?
a. Omar is fired from his low-skilled job but receives a large severance package. b. Linda receives on-the-job training, which could lead to a promotion. c. Josh receives a sizable bonus for the first time. d. Mary has her vacation time reduced from two weeks to one week.
A lower real interest rate ________ investment spending and ________ consumption spending.
A. increases; decreases B. decreases; decreases C. decreases; increases D. increases; increases