In the classical view, if desired saving exceeds desired investment
A) the interest rate would increase. B) government spending must rise.
C) government spending must fall. D) the interest rate would decline.
D
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Money is best defined as
A) anything that can be sold to pay for something. B) currency. C) anything that is backed by gold. D) anything accepted as a means of payment. E) anything that has value.
Giffen goods have positively-sloped demand curves because they are
a. inferior goods with no substitution effect. b. normal goods with no substitution effect. c. inferior goods for which the substitution effect outweighs the income effect. d. inferior goods for which the income effect outweighs the substitution effect.
The typical public assistance grant in the United States
A. leaves the family well below the poverty line. B. leaves the family just below the poverty line. C. puts the family just above the poverty line. D. puts the family well above the poverty line.
Suppose that Harold buys collision insurance for his car and then drives it recklessly. This is an example of:
A. a positive spillover. B. moral hazard. C. adverse selection. D. irrational behavior.