The exchange rate of Country X is set by government decisions and maintained by government actions. Country X follows a
a. floating exchange rate policy.
b. free market exchange rate policy.
c. pegged exchange rate policy.
d. fixed exchange rate policy.
d
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Suppose a large firm allows its employees to choose whether to participate in its health insurance plan
The firm is trying to decide between two plans: Plan I has a low monthly premium but a high deductible, and Plan II has a high monthly premium but a low deductible. Under which plan is adverse selection likely to be a bigger problem? A) Plan II because it is likely to draw participants who expect high medical costs. Healthy individuals who do not expect to consume much health care services will not be willing to pay the high premiums. B) Plan II because it is likely to draw employees who tend to over-consume health care services because of the low deductible. Insurance companies are likely to end up paying out more claims than the premiums they collect. C) Plan I because it is likely to draw the relatively healthy employees who do not expect to spend much on health care. Because the monthly premiums are low, the insurance company has to bear a bigger financial burden in the event of serious illnesses. D) Plan I because it is likely to draw participants who expect high medical costs. This group expects to consume much health care services and therefore prefer low deductibles.
If Stock A and Stock B both decrease in value at the same time, they are
A) negatively correlated. B) uncorrelated. C) positively correlated. D) bad bets.
Which of the following statements is true?
A) Another name for capital consumption allowance is depreciation. B) When there are two consecutive quarterly declines in Real GDP the economy is said to be in recession (based on the standard definition). C) In the expansion phase of a business cycle, Real GDP rises beyond the recovery. D) a and b E) a, b, and c
When a government reduces its budget deficit, then that country's
a. supply of loanable funds shifts right. b. supply of loanable funds shifts left. c. demand for loanable funds shifts right. d. demand for loanable funds shifts left.