If a voluntary trade takes place,
a. both parties will benefit from the transaction.
b. only one party will benefit from the transaction.
c. neither party will benefit from the transaction.
d. both parties will benefit only if the government regulates the transaction.
a
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
When a lack of information exists for parties to a deal:
A. it is always worth getting more information before making a decision. B. the cost of acquiring information sometimes is prohibitive and not worth it. C. an exchange will never happen. D. the exchange will always happen anyway, with little chance of maximizing surplus.
The school that argues that through tax reductions, spending cuts, and deregulation, government creates the proper incentives for the private sector to increase aggregate supply is known as the
a. rational expectations school b. neo-Keynesian school c. school of supply-side economics d. new Classical school e. classical school
Which of the following is not a result of moral hazard?
a. Increased medical care spending b. Higher health insurance premiums c. Increased likelihood of visiting a physician d. Deductibles and coinsurance e. Rational ignorance