Suppose some members of Enron's board of directors are aware of the company's true financial condition, information that is not available to most investors. This is an example of
A) lemon problem.
B) moral hazard.
C) adverse selection.
D) asymmetric information.
D
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According to Okun's law, if output grew 7% and full-employment output rose 5%, what would be the change in the unemployment rate?
A) -4 percentage points B) -1 percentage point C) 1 percentage point D) 4 percentage points
A market is said to "clear" when
A) sellers give up selling their goods because they can't find any buyers. B) buyers and sellers are able to buy and sell as much as they want at the market price. C) the government decides to shut it down. D) sellers run out of goods to sell.
Which of the following statements best describes the relationship between a stronger currency and exports?
a. A stronger euro discourages exports by a European firm because it makes the costs of production in the domestic currency higher relative to the sales revenues earned in another country. b. A stronger euro encourages exports by a European firm because it makes the costs of production in the domestic currency higher relative to the sales revenues earned in another country. c. A stronger euro discourages exports by a European firm because it makes the costs of production in the domestic currency lower relative to the sales revenues earned in another country. d. A stronger euro encourages exports by a European firm because it makes the costs of production in the domestic currency lower relative to the sales revenues earned in another country.
A contractionary monetary policy causes
A. higher interest rates, which increases the foreign demand for U.S. financial instruments, which causes interest rates to decrease. There is no effect on net exports. B. lower interest rates, which decreases the foreign demand for U.S. financial instruments, raising the international price of the dollar and increasing net exports. C. higher interest rates, which increases the international price of the dollar and decreases net exports. D. higher interest rates, which decreases the foreign demand for U.S. financial instruments, raising the international price of the dollar and increasing net exports.