Refer to Figure 17-3. In Panel A, at high wages (segment iii)
A) the price of leisure is rising relative to the price of labor.
B) laborers work more as wages increase.
C) the price of leisure is falling relative to the price of labor.
D) labor suppliers take more leisure as wages increase.
D
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The presence of deposit insurance in the savings and loan industry
A) created an adverse selection problem because good S&Ls were forced out of the market. B) solved its own adverse selection problem because it pushed badly managed S&Ls out of the market. C) contributed to "depositor moral hazard" but did not involve a moral hazard problem with owners. D) contributed to "moral hazard by owners" but did not involve a moral hazard problem with depositors. E) contributed to both "depositor moral hazard" and "moral hazard by owners."
Which of the following actions by the Fed would cause the money supply to increase?
A. Purchases of government bonds from banks. B. An increase in the reserve requirement. C. An increase in the discount rate. D. Sales of government bonds to the public.