A strengthening of the dollar will immediately shift
A. aggregate demand to the left.
B. aggregate supply to the right.
C. aggregate demand to the right.
D. aggregate supply to the left.
Answer: C
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Insurance companies charge annual premiums to collect revenue, which they then use to pay customers who file claims for damages they incur. As a result of the moral hazard problem (1) what is the effect on the percentage of policy holders making claims, and (2) what is the effect on the average premium charged when compared to a world with no moral hazard problem?
a. The percentage of policy holders making claims is higher; average annual premiums are lower. b. The percentage of policy holders making claims is lower; average annual premiums are lower. c. The percentage of policy holders making claims is higher; average annual premiums are higher. d. The percentage of policy holders making claims is lower; average annual premiums are higher.
One piece of evidence in favor of the efficiency wage model is that some sectors of the economy pay relatively high wages, whereas other sectors pay lower wages. This supports the efficiency wage model as it seems to provide evidence of what?
A. High-wage firms take advantage of delayed-compensation contracts. B. Workers voluntarily provide bonds in case they are caught shirking. C. Unemployment is constant across sectors. D. Dual labor markets exist. E. There are compensating differentials being paid depending on the type of work being done.
Which of the following statements is true?
A. National income is total income earned by households whereas personal income is total income received by households (including transfer payments). B. Disposable personal income equals personal income plus personal taxes. C. The expenditures approach yields a higher GDP value than the income approach. D. The expenditures approach yields a lower GDP value than the income approach.
The Hatfields and the McCoys both earn $50,000 per year in real terms in the labor market, and both families are able to earn a 25% real interest rate on their savings. Assume that all interest is paid out as income in the following year. In the year 2010, both families began to save. The Hatfields saved 8% of their income each year; the McCoys saved 10%. In 2010, the Hatfields consumed ________ more than the McCoys; in 2011, the Hatfields consumed ________ than the McCoys.
A. $2,000; about $250 more B. $1,000; about $800 more C. $2,000; about $250 less D. $1,000; about $800 less