When homeowners sell a house, part of the paperwork they complete is a statement of disclosure on which the homeowners are supposed to reveal everything that they know is wrong with the house. The purpose of the statement of disclosure is to try to solve the
a. principal-agent problem.
b. moral-hazard problem.
c. adverse-selection problem.
d. signaling problem.
c
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According to the Monetarists, average inflation is higher today than it was a hundred years ago because of
a. the lack of fiscal responsibility. b. the increased use of stabilization policy. c. high interest rates, which increase the cost of borrowing. d. unstable investment demand. e. unstable money demand.
A consumer has budgeted a total of $225 to spend on two goods, X and Y. She likes to consume a unit of good X in combination with good Y. Any unit of X she cannot consume with Y is useless. Similarly, any unit of good Y she cannot consume with good X is useless. The price of a unit of good X is $5, and the price of a unit of good Y is $10. How many units of each good will the consumer purchase? Briefly explain your reasoning.
What will be an ideal response?
Cost-of-living adjustments
A. Maintain constant real interest rates. B. Cause individuals to shorten their time horizons. C. Reduce the price effect of inflation. D. Allow individuals to maintain their purchasing power during inflation.
Explicit costs would include:
a. rent. b. the interest loss of the business owner on money withdrawn from his/her saving account and invested in the business. c. the loss of rent on a building the business owner owns and uses in his/her business. d. the opportunity costs of the business owner's time. e. the use of tools owned by the business owner and dedicated to the business.