Why do people often tend to take risks if they are insured?
What will be an ideal response?
People often tend to take risks if they are insured because they do not have to bear the costs if anything goes wrong. Such behavior is called moral hazard. It happens when one party in a transaction takes actions based on his or her private information that is unavailable to the other party but affects its payoff.
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Compare the scale of agricultural production in the advanced and devel-oping economies. In which is the percentage higher? In which is the total amount produced greater?
What will be an ideal response?
The legislation that made all depository institutions regardless of Federal Reserve membership subject to the reserve requirements established by the Fed is called the:
A) Glass-Steagall Act. B) McFadden Act. C) Monetary Control Act of 1980. D) none of the above
The Fed's holdings of securities consist primarily of ________, but also in the past have included ________
A) Treasury securities; bankers' acceptances B) municipal securities; bankers' acceptances C) bankers' acceptances; Treasury securities D) Treasury securities; municipal securities
The unemployment rate is computed by dividing the _____ by the _____.
Fill in the blank(s) with the appropriate word(s).