A person buying a used car could ask the seller for permission to take the car to a mechanic for an inspection. If the seller says no, the prospective buyer has gained information about the car. This process is known as:
A. screening.
B. internalizing the externality.
C. licensing.
D. signaling.
Answer: A
You might also like to view...
The amount of consumption expenditure that takes place when income is zero is
A) called induced consumption. B) called zero-based consumption. C) equal to zero. D) called autonomous consumption. E) equal to saving.
Compared to English and colonial vessels, Dutch flyboats:
a. were lighter. b. required smaller crew. c. carried fewer armaments. d. cheaper to build and operate. e. All of the above.
The Federal Reserve System:
a. was created by and is owned by the government. b. pursues independent fiscal policy at the behest of Congress. c. never acts to control inflation. d. pursues an independent monetary policy which can conflict with the government's economic policy. e. only acts to lower taxes and increase spending when there are recessionary tendencies in the economy.
What does "lender of last resort" mean with respect to the Federal Reserve?
(A) It will lend money to a bank in a financial emergency. (B) It has the power to decide how much money a bank can lend out. (C) It decides interest rates for interbank loans. (D) It makes decisions about who a bank can lend money to.