Which of the following is a consequence of deposit insurance?
A) It may induce the officers of a bank to take more risks.
B) It encourages banks to make loans only to the most credit-worthy customers.
C) It minimizes the risk of defaulting on loans made to the bank's customers.
D) It encourages depositors to closely scrutinize a bank's lending activities.
Answer: A) It may induce the officers of a bank to take more risks.
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In a long-run equilibrium, firms in both perfectly competitive markets and monopolistically competitive markets produce a quantity below the efficient scale of production
a. True b. False Indicate whether the statement is true or false
An economy has two workers, Paula and Ricardo. Every day they work, Paula can produce 4 computers or 16 shirts, and Ricardo can produce 6 computers or 12 shirts. What is the opportunity cost for Paula to produce one shirt?
A. 4 computers B. ¼ computer C. ½ computer D. 2 computers
Although the relationship between output and the unemployment rate is not as simple as Okun's Law represents it to be, it is true that
A. a 1% increase in output tends to correspond to a greater than 1% decrease in the unemployment rate. B. a 1% increase in output will have no effect on the unemployment rate. C. a 1% increase in output tends to correspond to a less than 1% decrease in the unemployment rate. D. a 1% increase in output tends to correspond to a 1% decrease in the unemployment rate.
The figure above shows a
A) cross-section graph. B) scatter diagram. C) time-series graph. D) trend diagram. E) slope.