Which of the following statements is false?
A) In 2006, some people with subprime and other nontraditional loans were not able to make their monthly payments on their mortgage loans.
B) The leverage ratio is the ratio of assets to capital.
C) John Taylor argued that the global savings glut was the reason for the low interest rates in the early-2000s and for the rise in housing prices that followed.
D) It is possible for a bank to have the value of its liabilities greater than the value of its assets.
E) none of the above
C
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Compared to a perfectly competitive firm, the demand curve facing a monopolistically competitive firm is
A) less elastic because monopolistically competitive firms produce similar, but not identical, products. B) more elastic because in the long run, the demand curve is tangent to the firm's average total cost curve. C) just as elastic because there are many sellers in both markets. D) more elastic because there are many close substitutes for the product of a monopolistically competitive firm.
Because of scarcity, rationing is
A) unimportant because people get what they want. B) necessary because people cannot get everything they want. C) unimportant because prices clear markets. D) not a problem because governments can determine what everybody wants.