Trading risk faced by U.S. banks results from:
A. adverse selection.
B. changes in regulations.
C. the free-rider problem.
D. moral hazard.
Answer: D
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Suppose the elasticity of demand for a product is 0 and elasticity of supply is 1. If the government imposes a tax on the product, then
A) buyers and sellers pay exactly the same share of the tax. B) buyers pay all of the tax. C) sellers pay all of the tax. D) buyers pay a smaller share of the tax than do sellers, but both buyers and sellers pay some of the tax. E) because the elasticity of demand is zero, the government collects no revenue from this tax.
Explain the difference between a firm's revenue and its profit
What will be an ideal response?
Which of the following would tend to decrease the demand for carpenters?
a. An increase in the wages of carpenters. b. An increase in the price of houses. c. A decrease in the demand for houses. d. An increase in the supply of carpenters.
Assume that the economy is in a recession and there is a budget deficit. A strict balanced-budget amendment that would require the federal government to balance its budget during a recession would be:
A. expansionary and worsen the effects of the recession. B. expansionary and counter the effects of the recession. C. contractionary and worsen the effects of the recession. D. contractionary and counter the effects of the recession.