Used car buyers believe a car is good quality when the seller signals the car's quality by offering a warranty because
A) car sellers would never lie.
B) car buyers are gullible.
C) the signal cannot be false.
D) a false signal can be costly to the seller.
D
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Suppose that the U.S. government acquires more foreign currency. How does this change affect the balance of payments accounts?
A) The capital and financial account is negative. B) The capital and financial account is positive. C) The official settlements account balance is negative. D) The official settlements account balance is positive. E) The balance of payments account sum to a positive number equal to the value of the additional foreign currency the government has obtained.
In the market for reserves, if the federal funds rate is between the discount rate and the interest rate paid on excess reserves, a decline in the reserve requirement ________ the ________ curve of reserves and causes the federal funds interest rate
to fall, everything else held constant. A) decreases; demand B) increases; demand C) increases; supply D) decreases; supply