When the average buyer of an insurance policy is likely to have higher risk than others in his class, this is known as
A. adverse selection.
B. moral hazard.
C. asymmetric information.
D. an HMO.
A. adverse selection.
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Suppose Belgium produces only two goods, chocolate and lace. If Belgium has a comparative advantage in lace, a move toward free trade will
A) benefit chocolate workers, harm lace workers in the short run, but benefit the nation as a whole. B) harm chocolate workers in the short run, benefit lace workers, but benefit the nation as a whole. C) benefit chocolate workers, harm lace workers in the short run, but harm the nation as a whole. D) harm chocolate workers in the short run, harm lace workers, but benefit the nation as a whole.
When the aggregate expenditures of a nation exceed its output, _____
a. the nation's inventories fall b. the government purchases of goods and services fall c. the nation's firms decide to decrease their level of production d. there will be an inflationary increase in the price level
Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns
to complete equilibrium. a. The quantity of real loanable funds per time period rises and nominal value of the domestic currency remains the same. b. The quantity of real loanable funds per time period falls and nominal value of the domestic currency remains the same. c. The quantity of real loanable funds per time period and nominal value of the domestic currency remain the same. d. The quantity of real loanable funds per time period rises and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
Which of the following is true?
A. In ordinary least squares estimation, each observation is given a different weight. B. In weighted least squares estimation, each observation is given an identical weight. C. In weighted least squares estimation, less weight is given to observations with a higher error variance. D. In ordinary least squares estimation, less weight is given to observations with a lower error variance.