Adverse selection happens because
a. One of the parties has more information about itself then the other party
b. Individuals that the principle want to least select are the ones more likely to apply
c. Parties most likely to accept an offer would be least qualified
d. All of the above
d
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If velocity is highly unstable, then targeting the money supply
a. will be effective in stabilizing the LM curve and interest rates. b. has the same effects as targeting interest rates. c. will be ineffective in stabilizing aggregate demand. d. none of the above.
Steel cannot be produced without iron. Hence, the price elasticity of demand for iron by steel mills will be
A) perfectly elastic. B) elastic. C) inelastic. D) unitary elastic.
Last year the exchange rate between U.S. dollars and Mexican pesos was 10 pesos per dollar. Today is it 11 pesos per dollar. Here, the dollar ________ against the peso, and the peso ________ against the dollar
A) appreciated; depreciated B) depreciated; appreciated C) appreciated; appreciated D) depreciated; depreciated
The difference between the marginal social cost and the private cost of a common property resource represents:
A) the social discount rate. B) a deadweight loss. C) is generally negative because the people who use the resources assign higher value to them than other members of society. D) the opportunity cost of reducing the resource by one unit for other members of society.