A key property of a Diamond-Dybvig bank is
A) it is well-diversified.
B) it lends to borrowers.
C) it provides benefits very different from the provision of insurance.
D) it trades with other banks.
A
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When the exchange rate falls, in the foreign exchange market the
A) quantity demanded of the currency increases. B) demand for the currency increases. C) quantity demanded of the currency decreases. D) demand for the currency decreases.
The key to assessing whether fiscal policy is expansionary is to observe the change in the cyclically adjusted budget as a percentage of GDP.
Answer the following statement true (T) or false (F)
Marginal costs are defined as
A) the change in total costs due to a one-unit change in production. B) costs that are viewed as marginal; of little or small importance. C) costs that represent a change, but one that cannot be measured correctly. D) the change in the decisions that are made by households and firms.
If a person claims, "I wouldn't eat anchovies if you paid me," we can assume that his marginal utility of anchovies is
A) positive. B) positive, but decreasing. C) zero. D) negative.