In the allocation of resources between present and future
a. the market works imperfectly.
b. the market works perfectly.
c. centrally planned economies are more efficient than market economies.
d. the invisible hand guarantees efficiency in market economies.
a
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A decrease in the supply of money will lead to a(n)
A) increase in equilibrium real GDP and an increase in the equilibrium interest rate. B) increase in equilibrium real GDP and a decrease in the equilibrium interest rate. C) decrease in equilibrium real GDP and an increase in the equilibrium interest rate. D) decrease in equilibrium real GDP and a decrease in the equilibrium interest rate.
The risk that a borrower has a greater understanding about their potential future behavior than a potential lender is known as ________
A) the problem of adverse selection B) the problem of moral hazard C) ornamental torsion D) the asymmetric innovation problem