A Principles of Microeconomics Professor Wants to Know How Much

question 179

Multiple Choice

A Principles of Microeconomics professor wants to know how much prior knowledge her students have before beginning the class so she gives them a pre-test. This action is an example of

• A)signaling.
• B)screening.
• C)adverse selection.
• D)moral hazard.

---

Definitions:

Store of Value

A store of value is an asset that maintains its value over time without depreciating, allowing it to be saved, retrieved, and exchanged at a later time.

Medium of Exchange

A mediating tool or mechanism that enables the buying, selling, or exchanging of products among individuals or groups.

Standard of Deferred Payment

A function of money that allows for goods and services to be paid for at a future date.

M1

Refers to a category of the money supply that includes all physical money, such as coins and currency, as well as demand deposits, checking accounts, and negotiable order of withdrawal (NOW) accounts.