Which of the following helps in reducing the problem of adverse selection in health insurance markets?
A) Insurance mandates
B) High premiums
C) High rates of taxation
D) Insurance coverage
A
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When there is a shift in autonomous expenditure, why is there a multiple expansion of income and real GDP? Trace the multiplier effect through the first four rounds when there is an increase in autonomous expenditure of $40 billion and the marginal propensity to consume is 0.75
During a war, a government will often draft people, most of whom are presently employed, into the army. An economist, computing the real cost of the war, would be sure to include which of the following items?
a. the value of the civilian goods no longer produced by the new soldiers b. the cost of feeding and clothing the new soldiers c. the dollar cost of the payroll d. the higher prices of civilian goods due to wartime shortages e. the cost of transporting the soldiers to combat
If the reserve ratio is 5 percent, then $600 of additional reserves can create up to
a. $30 of new money. b. $3,000 of new money. c. $12,000 of new money. d. None of the above is correct.
At Point C the price elasticity of demand is -1. Along line segment AB of the demand curve, the demand is
a. elastic. b. unit elastic. c. inelastic. d. either elastic or inelastic, depending on whether price increases or decreases.