A net capital inflow occurs in open economies where investment is:
A. higher than national savings.
B. lower than national savings.
C. equal to national savings.
D. higher than national spending.
A. higher than national savings.
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If a firm's marginal product of labor is less than its average product of labor, then an increase in the quantity of labor it employs definitely will
A) decrease its total product. B) decrease its average product of labor. C) increase its marginal product of labor. D) not change its average product of labor.
As a percentage of GDP, health care spending on Medicare and Medicaid is expected to double over the next 40 years unless health care costs begin to grow at a slower rate
Indicate whether the statement is true or false
Because of asymmetric information, the failure of one bank can lead to runs on other banks. This is the
A) too-big-to-fail effect. B) moral hazard problem. C) adverse selection problem. D) contagion effect.
Both the Federal Reserve System in the United States and the European Central Bank are comprised of geographically dispersed Banks. How might such decentralization contribute to successful monetary policy?
What will be an ideal response?