In the absence of a financial system, the two-period model without taxes predicts that
A) consumption is more volatile that output.
B) consumption is as volatile as output.
C) consumption is less volatile than output.
D) We do not know.
B
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In the 1980s, banks responded to the loss of loans to the commercial paper market by increasing loans to all the following except
A) less creditworthy businesses. B) commercial real estate loans. C) loans to less-developed countries. D) large corporations.
When people suddenly want to buy something, supply increases
a. True b. False Indicate whether the statement is true or false
Management and a labor union are bargaining over how much of a $100 surplus to give to the union. The $100 is divisible up to one cent. The players have one shot to reach an agreement. Management has the ability to announce what it wants first, and then the labor union can accept or reject the offer. Both players get zero if the total amounts asked for exceed $100. Which of the following is NOT a Nash equilibrium?
A. Neither management requesting $100 and the labor union accepting $0 nor management requesting $70 and the labor union accepting $20 are Nash equilibria. B. Management requests $70 and the labor union accepts $20. C. Management requests $50 and the labor union accepts $50. D. Management requests $100 and the labor union accepts $0.
Households are said to have ________ wealth when the value of their assets is less than the debts they owe.
A. positive B. negative C. zero D. undefinable