In order to reduce the undesirable effects of moral hazard, an insurance company can:
A. reject the renewal of policies of those people with really bad records.
B. classify clients into different types according to their history.
C. introduce a deductible.
D. All of the statements associated with this question are correct.
Answer: D
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If the rate of inflation in the economy is steady at 5 percent per year, how does the short-run Phillips curve predict that the unemployment rate will be changing, if at all? Does your answer change if inflation in the economy is 0 percent?
Illustrate your answer with a Phillips curve.
Which type of integration requires adapting domestic policies to coordinate with those of trading partners?
What will be an ideal response?
The marginal product of the 14th worker is 8 and the firm sells its output for $4 per unit. If labor is the only variable cost, then the value of the 14th worker's marginal product is
A. $12. B. $32. C. $4. D. $2.
Refer to Figure 14.2. A movement from point d to point b could be caused by a(n):
A. increase in government spending. B. increase in the price of oil. C. increase in taxes. D. decrease in short-run aggregate supply.