The potential for a financial breakdown at large institutions to spread throughout the financial system is called
A) a systemic risk.
B) a too-large-to-fail problem.
C) an averse selection problem.
D) a moral hazard.
A
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The Who-Needs-A-Doctor? Company makes a do-it-yourself rhinoplasty kit. The company is deciding whether to include a safety feature that would cost $40 for each kit
The company estimates the probability of death without the safety feature is 1/10,000 and the death cost per kit is $50. Based on this information, answer the following questions: a. What is the value the company has placed on a life? b. What is the company's cost-benefit recommendation? c. If the company has overestimated the probability of death and the true probability of death is 1/15,000, what is the true death cost per rhinoplasty kit? d. If the company has overestimated the probability of death and the true probability of death is 1/15,000, what would the true cost-benefit recommendation be for the company? e. If the company has correctly estimated the probability of death but has underestimated by one-half the true value of a life, what is the true death cost per rhinoplasty kit? f. If the company has correctly estimated the probability of death but has underestimated by one-half the true value of a life, what would the true cost-benefit recommendation be for the company?
Under what condition will a decrease in aggregate demand result in no decline in the price level?
A. The aggregate demand curve intersects an upward-sloping segment of the aggregate supply curve. B. The aggregate demand curve intersects a vertical segment of the aggregate supply curve. C. The aggregate demand curve is upward sloping. D. The aggregate demand curve intersects a horizontal segment of the aggregate supply curve.
In Figure 15.2, at an interest rate of 9 percent, there is
A. An excess supply of money of $100 billion. B. An excess supply of money of $200 billion. C. Equilibrium in the money market. D. An excess demand for money of $100 billion.
Suppose all tickets to the World Series have already been sold. Will any further sales occur if the going price rises?
A) No, and therefore a higher price will have no effect. B) No, but a smaller quantity will be demanded. C) Not unless more tickets are printed. D) Yes, as some ticket-holders sell to others. E) Yes, but the further sales will reduce the price to the original level.