An example of moral hazard is
a. workers working diligently even though the boss is not looking
b. health care insured dieting and exercising
c. drivers of safer cars texting on their phones while driving
d. borrowers investing their loan proceeds exactly as the bank requires
c
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Opponents of active stabilization policy
a. advocate a monetary policy designed to offset changes in the unemployment rate. b. argue that fiscal policy is unable to change aggregate demand or aggregate supply. c. believe that the political process creates lags in the implementation of fiscal policy. d. None of the above is correct.
If a person were in the 25% tax bracket and given the choice of a $500 credit or a $2500 deduction,
A. he would take the credit every time. B. he would not care. They would constitute the same tax benefit. C. he would take the deduction every time. D. he would not qualify for either.
Which of the following is a disadvantage of? corporations?
A. Longevity B. Ability to raise capital C. Liquidity D. Reporting requirements E. Limited liability
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point D to Point B, the opportunity cost of hybrid cars, measured in terms of motorcycles,
A. decreases. B. remains constant. C. increases. D. initially increases, then decreases.