When bank loan officers screen loan applicants to eliminate potentially bad risks, they are attempting to mitigate the problem of
A) adverse selection.
B) moral hazard.
C) interest rate risk.
D) illiquidity.
A
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Which of the following is associated with classical growth theory?
I. Growth in real GDP can continue indefinitely. II. Technological growth increases as the population grows. III. Population explosions bring real GDP per person back to subsistence levels. A) I B) II C) III D) I and III
Which of the following statements characterizes government purchases in the United States between 2001 and 2011?
A) Government purchases as a share of GDP have declined. B) Government purchases as a share of GDP have increased. C) Government purchases as a share of GDP have remained constant. D) Government purchases have fluctuated widely over this period.
Which of the following is NOT an example of a transfer payment?
A. Social Security benefits B. government salaries C. food stamps D. unemployment compensation
You are the newly appointed sales manager of the Rock Computer Tablets Company and have been charged with the task of increasing revenues. Your economics consultants have informed you that at present price and output levels, price elasticity of demand for your product is less than one. You should:
A. Decrease prices B. Increase prices C. Hold prices constant and increase supply D. Cut advertising expenditures to save money