When long-run average costs increase as a result of industry growth, there are
A. external diseconomies.
B. internal diseconomies.
C. internal economies.
D. external economies.
Answer: A
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The analysis of Chapter 15 argues that the painfully slow recovery following the Great Recession, in which the accumulation of mistakes during the housing bubble are not being fully corrected, is explained by
A) the Fed's continued attempt to keep interest rates low and "help" the housing sector recover. B) the negative consequences of deficit policies that attempt to "stimulate" the economy. C) both of the above reasons. D) neither of the above reasons.
Agency problems in the subprime mortgage market included all of the following EXCEPT
A) homeowners could refinance their houses with larger loans when their homes appreciated in value. B) mortgage originators had little incentives to make sure that the mortgagee is a good credit risk. C) underwriters of mortgage-backed securities had weak incentives to make sure that the holders of the securities would be paid back. D) the evaluators of securities, the credit rating agencies, were subject to conflicts of interest.
The first federal antitrust law was the:
a. Clayton Act. b. Federal Trade Commission Act. c. Sherman Antitrust Act. d. Interstate Commerce Act.
There are frequently market solutions that the government can use to deal with externalities
a. True b. False Indicate whether the statement is true or false