Which of the following is a possible solution to the adverse selection problem?
a. Screening
b. Signaling
c. All of the above
d. None of the above
c
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Which of the following may result in a higher equilibrium price for a product?
a. Advertising b. Expectations c. Imperfect information d. All of the above answers are true. e. None of the above answers a.-c. are true.
Which of the following policies would be most likely to reduce the rate of inflation?
a. sale of government bonds by the Federal Reserve b. a reduction in the discount rate c. an increase in the size of the federal budget deficit d. a reduction in the required reserves imposed on the banking system
Social Security payments depend on an individual's wages, but the benefits formula is progressive.
Answer the following statement true (T) or false (F)
(Advanced analysis) Susie has $500 invested in a financial asset earning an annually compounded interest rate of 8 percent. If Susie plans to cash in the asset when it is worth $700, about how long will she have to wait?
A. 4.4 years. B. 5 years. C. 6.1 years. D. 8 years.