Moral hazard
a. makes a free market in insurance hard to operate.
b. is the tendency of insurance to encourage the source of risk.
c. tends to make the cost of insurance higher and the market for insurance less efficient.
d. All of the above are correct.
d
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Andrew Carnegie was largely responsible for the development of the _________ industry; while John D. Rockefeller was largely responsible for the development of the _________ industry.
Fill in the blank(s) with the appropriate word(s).
The ratio of bank's equity to its total assets is called
A) capital requirements. B) leverage. C) assets requirement. D) risk.
The result that perfectly competitive firms produce at the lowest per-unit cost is derived from the assumptions of
A. homogeneous products. B. few sellers. C. firms facing horizontal demand curves. D. free entry and exit.
An economy in which a central authority draws up a plan that establishes what will be produced and when, sets production goals, and makes rules for distribution is a
A. free-market economy. B. command economy. C. laissez-faire economy. D. public-goods economy.