Which of the following is NOT a reason that people tend to deposit their funds with banks rather than lend their funds directly to other individuals?
A) asymmetric information problems B) adverse selection problems
C) moral hazard problems D) liquidity problems
D
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Which of the five goods, A to E, whose price elasticities of demand are shown in the choices below, is the best candidate to tax if the goal is to acquire maximum tax revenue?
a. good A, with price elasticity of 0.90 b. good B, with price elasticity of 3.40 c. good C, with price elasticity of 1.25 d. good D, with price elasticity of 0.50 e. good E, with price elasticity of 1.00
The change in consumption divided by a change in income is called the
a. consumption function b. marginal propensity to consume c. marginal propensity to spend d. spending function e. changing propensity to consume
Keeping interest rates stable is:
A. a key goal, because stable interest rates will result in all other goals being achieve B. not a goal of the central bank. C. a secondary goal for central banks. D. the most important goal for a central bank.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point D to Point B, the opportunity cost of hybrid cars, measured in terms of motorcycles,
A. initially increases, then decreases. B. increases. C. remains constant. D. decreases.