Recall the Application about how having car insurance affects driving behavior to answer the following question(s).Recall the Application. Explain the effect of mandatory car insurance laws on the number of traffic accidents and fatalities.
What will be an ideal response?
When car insurance is mandatory, the number of insured drivers increases. When drivers are insured, the theory of moral hazard suggests that they will drive less carefully than an uninsured driver, since the insured driver will bear less than the full cost of a collision. When drivers are less careful, the number of traffic accidents and traffic fatalities increases.
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Although the Federal Reserve had traditionally made discount loans only to ________, in response to the financial crisis in 2008 the Fed made primary dealers eligible for discount loans as well
A) commercial banks B) investment banks C) government agencies D) mortgage lenders
The exchange rate
a. is the ratio of two countries' GDPs. b. is the rate at which one country's money is flowing into another country. c. states the price of one currency in terms of another currency. d. is closely related to the concept of absolute advantage.
Which of the following best illustrates perfect competition?
A. wheat farming B. orange growers setting quotas under the Sunkist cooperative C. General Motors advertising campaign for its cars D. Coca-Cola and Pepsi battling for market share
An act of production, as economists use the term, is demonstrated by which of the following?
A. An individual buys municipal bonds to avoid taxes. B. A firm buys a pre-existing building in order to expand its operations. C. A worker places money in a pension fund. D. A local nonprofessional theater company performs a play.