That most used cars are sold by intermediaries (i.e., used car dealers) provides evidence that these intermediaries
A) have been afforded special government treatment, since used car dealers do not provide information that is valued by consumers of used cars.
B) are able to prevent potential competitors from free-riding off the information that they provide.
C) have failed to solve adverse selection problems in this market because "lemons" continue to be traded.
D) have solved the moral hazard problem by providing valuable information to their customers.
B
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The Bureau of Labor Statistics does not count discouraged workers as unemployed. Suppose discouraged workers were counted as unemployed. Explain how the unemployment rate and the labor force participation rate would change
What will be an ideal response?
A higher domestic price level should
A) decrease net exports. B) increase desired investment. C) increase real wealth and consumption. D) none of these.