Weak economies with shrinking incomes tend to buy more of everything, including imports.

Weak economies with shrinking incomes tend to buy more of everything, including imports.
 a. True
  b. False

QUESTION 2

The publisher that paid Arthur Arthur, the popular novelist, a 2 million advance on his recent novel, which sold only 42 copies, fell victim to
 a. moral hazard
  b. an authority relation
  c. the winner's curse
  d. the principal-agent problem
  e. adverse selection

QUESTION 3

The current account records
 a. last year's flows of funds into and out of the country
  b. current flows of imports and exports of goods and services, net income earned by U.S. residents from foreign assets, and net transfer payments
  c. current flows of imports and exports of goods only
  d. only net income earned by U.S. residents from foreign assets
  e. only current flows of imports and exports of goods and services and net transfer payments

QUESTION 4

The winner's curse is more likely
 a. when there is only one bidder
  b. when demand for the good being auctioned is increasing
  c. when the value of the good being auctioned is common knowledge
  d. when the value of the good being auctioned is uncertain
  e. when the marginal cost of information is low

QUESTION 5

Which of the following is not considered a resident when calculating the balance of payments?
 a. governments
  b. capital equipment
  c. organizations
  d. firms
  e. people

QUESTION 6

If the value of a cable TV franchise is uncertain, too much may be bid for the franchise. This is an example of
 a. moral hazard
  b. an authority relation
  c. the winner's curse
  d. the principal-agent problem
  e. adverse selection

QUESTION 7

A country's balance of payments summarizes all economic transactions during a given period between residents of that country and residents of other countries.
 a. True
  b. False

QUESTION 8

The winner's curse is more likely when the value of a good at auction is common knowledge.
 a. True
  b. False