Which of the following would you expect to see for borrowers with a high risk of default, compared to borrowers with a low risk of default?
A. A supply curve that is further to the right
B. A surplus of loans
C. A demand curve that is further to the left
D. A higher interest rate
Answer: D
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Adam Smith's Wealth of Nations, written in 1776, describes the market's invisible hand representing the
A) King of England's control over the colonies. B) control all governments have in organizing the market. C) efficiency the market achieves without the interference of governments. D) inefficiency of markets when governments do not organize them. E) invisible command system that efficiently allocates resources.
Farm groups spend considerable amounts of money to maintain and enlarge political support for farm subsidies. This illustrates:
A. coalitions. B. rent-seeking activity. C. the special-interest effect. D. the voting paradox.