During the 1930s, banks found it hard to solve the asymmetric information problem between borrowers and lenders, because ____
a. Many borrowers lacked adequate collateral
b. Changing federal bank regulations created uncertainty
c. The fall in the stock of money reduced aggregate demand
d. Interest rates had fallen to "liquidity trap" levels
a. Many borrowers lacked adequate collateral
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Consider the following weekly production possibilities of gloves and hats in Panama and Russia:
Russia Panama Gloves 20 180 Hats 80 90 What is each country's opportunity cost of producing gloves and hats? If the countries could, should they trade?
One World View article, "The Risks of China's Foreign-Exchange Stockpile," states that
A. The dollar is undervalued. B. The reserves of foreign exchange in China can cause inflation in China. C. The trade imbalance is due to an overvalued yuan. D. China's reserves of currency can cause deflation in China.