John and Jack are both trying to sell a used car to Jim. John's car is a lemon, a car that has a serious but nonobvious problem. Jack's car is a cherry, a car that has no problems. Jim cannot tell the difference between the cars. Economists say this information problem might be solved with signaling. Who has an incentive to find a way to signal quality?
A. John but not Jack
B. Jim
C. Both Jack and John
D. Jack but not John
Answer: D
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Investment pools gathered from a small number of very wealthy individuals or institutions are referred to as:
A) capital investment. B) institutional savings. C) fixed deposits. D) hedge funds.
The law of one price states that identical products should sell for the same price everywhere as long as transactions costs are zero
Indicate whether the statement is true or false
An increase in the interest rate is associated with an increase in bond prices
a. True b. False Indicate whether the statement is true or false
To derive net domestic product (NDP) from gross domestic product (GDP), we must subtract ________________ from GDP
A) the capital consumption allowance B) gross private domestic investment C) imports D) inventory investment E) the statistical discrepancy