Which of the following is a reason to think that government action may not be valuable to improve market outcomes with asymmetric information?
a. The private market can sometimes deal with information asymmetries using signaling and screening.
b. The government rarely has more information than the private parties.
c. Government actions have their own imperfections.
d. All of the above are correct.
d
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An increase in households' desired money holding causes a(n) _____ in interest rates. This causes a(n) _____ in investment spending and aggregate demand
Fill in the blank(s) with correct word
Answer the following questions true (T) or false (F)
1. In order to construct the budget line, one only needs to know the prices of the goods in question. 2. Normal goods are goods for which consumption falls (rises) when income increases (decreases). 3. The consumer is at equilibrium when the marginal rate of substitution is equal to the slope of the budget line.