Asymmetric information exists when
A. both parties to an exchange have all relevant facts about that exchange.
B. a good that is either nonrivalrous or nonexcludable is being sold on a market.
C. the two parties to an exchange differ in what they know about the good being exchanged.
D. neither party to an exchange is knowledgeable about the quality of the good being exchanged.
Answer: C
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The law of diminishing marginal returns from capital, states that a decrease in capital per worker beyond some level will result in diminishing returns of output per worker
Indicate whether the statement is true or false
The economy goes into recession. Which of the following lists contains things policymakers could do to try to end the recession?
a. increase the money supply, increase taxes, increase government spending b. increase the money supply, increase taxes, decrease government spending c. increase the money supply, decrease taxes, increase government spending d. decrease the money supply, increase taxes, decrease government spending
The Fed is unlike other central banks in that it
A. has 12 branches. B. is completely centralized. C. has no real powers. D. also has control over fiscal policy.
If you concluded from the fact that the last three recessions have occurred while Republicans were President that their fiscal policies create recessions, then you would be
A. wrong because causation and correlation are not the same. B. wrong and have fallen victim to the fallacy of composition. C. right. D. wrong because Democrats are much worse.