For a mortgage lender that makes mortgage loans to borrowers, which one of the following would be an example of adverse selection?
a. After the loan has been made, individuals become careless with their finances
b. Individuals most likely to default are the ones most likely to apply for the loan
c. Borrowers investing their loan proceeds differently than the bank requires
d. None of the above
b
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The value of leisure time is
A) included in GDP and, in recent years, has become an increasing large part of GDP. B) excluded from GDP. C) zero. D) directly included in GDP but, in recent years, has become a decreasing large part of GDP. E) directly included in GDP and, in recent years, has not changed much as a fraction of GDP.
As the economy nears the end of a recession, which of the following do we typically see?
A) increased spending on capital goods by firms B) further decreases in consumer spending C) increasing interest rates D) all of the above