Suppose the U.S. government encouraged consumers to trade in their old automobiles for more efficient, new models by paying up to $5,000 for the old automobiles
These consumers who did trade in their old automobiles to take advantage of the government offer would be exemplifying the economic idea that
A) people are rational. B) people respond to economic incentives.
C) optimal decisions are made at the margin. D) equity is more important than efficiency.
B
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Of the following groups, who gains from rent controls?
A) landlords B) construction workers and their union leaders C) poor people who have a hard time earning enough income to pay high rents D) high-income people who live in rent-controlled apartments
Subprime mortgages
A) are loans covered by reserve requirements of commercial banks. B) are home loans backed by the Treasury. C) are home loans given to individuals without credit to meet the loan requirements. D) none of these choices.