In the market for loanable funds, the seller is considered to be
A) the lender.
B) the borrower.
C) the lender or the borrower depending upon the use to which the funds are put.
D) the lender or the borrower depending upon whether interest rates are rising or falling.
A
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Private information-collection firms fail to eliminate the adverse selection problem because
A) the law does not allow them to disclose private information about the creditworthiness of firms. B) they do not monitor borrowers after loans have been made. C) some investors who do not pay for their services will still profit from them. D) most companies refuse to provide them with any information.
Assume the analysis of Friedman and Phelps is correct, so that the following equation is valid: Unemployment rate = Natural rate of unemployment - a × (?ctual inflation - x). In this equation,
a. a is a parameter that measures how much actual inflation responds to expected inflation. b. a = 0 at the point of intersection of the short-run and long-run Phillips curves. c. x is the expected rate of inflation. d. All of the above are correct.
Lack of property rights =
What will be an ideal response?
An increase in government spending is more likely to lead to higher inflation when
A. real GDP is above potential GDP. B. the business cycle is near the trough. C. the unemployment rate is above the natural rate. D. the economy is in a recession.