Which of the following is mentioned in the textbook as a deficiency in private markets for which government action can provide a remedy?
A. Excessive levels of debt
B. Low interest rates
C. Pollution
D. High prices
Answer: C
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Which of the following is NOT a correct criticism of the Lorenz curve?
A) It does not include payments in kind. B) It does not deal with differences in family size. C) It ignores the impact of age distribution on income distribution. D) It refers to money income after taxes.
The classic example used to discuss the problem of adverse selection is:
A. fruit and produce markets, such as lemons. B. workers who shirk when their effort isn’t closely monitored. C. the imbalance of information that exists between a buyer and seller of a used car. D. drivers with insurance who tend to drive more recklessly.
In a secondary loan market, _____
a. loans are made to the borrowers b. loans are sold to other banks or financial institutions c. the rate of interest is higher than a primary loan market d. the rate of interest is lower than a primary loan market
ABC Co sells newly issued bonds. JLG Co sells newly issued stocks. Which company is raising funds in financial markets?
a. only ABC b. only JLG c. both ABC and JLG d. neither ABC nor JLG