Moral hazard is caused by
a. Hidden actions
b. Hidden information
c. Both of the above
d. None of the above
a
You might also like to view...
Which of the following is not a reason to be cautious about using GDP as an indicator of development?
a. Developing countries may not have many statisticians. b. GDP includes the value of harmful products. c. Many goods and services are exchanged for others and are not recorded as having a specific value. d. Traditional methods of comparing countries' GDP data have numerous statistical weaknesses. e. All of the above are reasons for caution.
Briefly explain the similarities and differences of decision making by the market sector and the public sector
What will be an ideal response?
Long-run full-employment equilibrium assumes: a. a downward-sloping production function. b. a downward-sloping long-run supply curve (LRAS)
c. the CPI index price level equals the equilibrium wage rate. d. the CPI equals aggregate demand (AD) equals short-run aggregate supply (SRAS) equals long-run aggregate supply (LRAS).
Which of the following is not an example of market failure?
a. Extreme income inequality b. Externalities c. Efficient equilibrium d. Lack of competition