Adverse selection is a situation in which one party, as a result of a contract, has an incentive to alter their behavior in a way that harms the other party to the contract

Suppose that the government passes a law requiring households to increase savings 10% above previous levels. According to Solow's growth theory, in the short run

A) output per capita grows more rapidly. B) output per capita grows at the constant steady state rate, n. C) output per capita stays constant. D) None of the above.

Suppose a bank has $100,000 in checking account deposits with no excess reserves and the required reserve ratio is 5 percent. If the Federal Reserve lowers the required reserve ratio to 3 percent, then the bank will now have excess reserves of

A) $0. B) $2,000. C) $3,000. D) $5,000.