Adverse selection:
A. is about actions and occurs after the parties have voluntarily entered into an agreement.
B. is always present when moral hazard arises.
C. relates to unobserved characteristics of people or goods and occurs before the parties have entered into an agreement.
D. All of these statements are true.
C. relates to unobserved characteristics of people or goods and occurs before the parties have entered into an agreement.
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A contractionary monetary policy raises the real interest rate, causing the domestic currency to ________, thereby ________ net exports
A) appreciate; raising B) appreciate; lowering C) depreciate; raising D) depreciate; lowering
Which of the following is not a reason to restrict trade?
A. Concerns about dumping. B. Concern about high prices for consumers. C. Protection of infant industries. D. Preservation of national security.
Refer to the following graph.
Which of the following curves demonstrates a unit elastic demand curve? (That is, a curve where elasticity is 1 at each point.)
A. A B. B C. C D. None of the answers is correct.
Suppose there is a labor shortage. Wages will ____ and the SRAS curve will shift ____
a. rise; left b. fall; left c. fall; right d. rise; right