When banks fail during a financial crisis, ________
A) the removal of these weak institutions serves to strengthen the financial system
B) the elimination of competitors is likely to spark a credit boom
C) there is a loss of information that can cause the crisis to worsen
D) surviving banks resort to financial engineering to retain customers
C
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The U.S. balance of payments status may improve when
A) the inflation rate increases in the United States relative to other countries. B) political instability in other countries increases. C) the world demand for U.S. products falls. D) the American government increases its spending on foreign aid.
The due process (or takings) clause is found in the
a. Fifth Amendment b. The Declaration of Independence c. The preamble to the U.S. Constitution d. In New Deal legislation e. First amendment
Assume a firm in a competitive industry is producing 800 units of output, and it sells each unit for $6 . Its average total cost is $4 . Its profit is
a. -$1,600. b. $1,600. c. $3,200. d. $8,000.
Figure 14.1 represents the market for used bikes. Suppose buyers are willing to pay $200 for a plum (high-quality) used bike and $50 for a lemon (low-quality) used bike. If buyers believe that 50% of used bikes in the market are lemons (low quality), what fraction of used bikes sold will actually be plums (high quality)?
A. 8/30 B. 22/30 C. 8/22 D. 30/30