We refer to situations in which individuals need to act collectively to reach solutions that will make everyone better off as:
A. collective-action problems.
B. moral hazard problems.
C. free-rider problems.
D. public-mind problems.
Answer: A
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In the above figure, the economy is initially at point B. If the Fed decreases the quantity of money, there is
A) a movement to point C. B) a movement to point A. C) a shift to AD2. D) a shift to AD1.
Refer to Figure 19-7. If the Indian government pegs its currency to the dollar at a value above $.02/rupee, we would say the currency is
A) parity valued. B) undervalued. C) overvalued. D) equilibrium valued.
For a commodity to function effectively as money it must be
A) easily standardized, making it easy to ascertain its value. B) difficult to make change. C) deteriorate quickly so that its supply does not become too large. D) hard to carry around.
If a company is expected to earn $1 per share this year and 2% more per share each subsequent year, the stock price in an efficient market will reflect
A. both of these pieces of information. B. the $1 per share but ignore the 2% annual growth. C. neither of these pieces of information. D. the 2% annual growth but not the starting point of $1 per share.