The tendency for the poorest risks to buy health insurance and the tendency of the insured to take more risks with their health are known as moral hazard and adverse selection, respectively
a. True
b. False
B
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From which of the following is it least difficult to exclude free riders?
A) A library book B) Landscaping on the edges of urban expressways C) Police protection D) Fireworks displays
If initially the money supply is $1 trillion, velocity is 5, the price level is 1, and real GDP is $5 trillion, an increase in the money supply to $2 trillion
A) increases real GDP to $10 trillion. B) causes velocity to fall to 2.5. C) increases the price level to 2. D) increases the price level to 2 and velocity to 10.
Marginal benefits are downward sloping when
A. there are no total benefits. B. the slope of the marginal benefits curve is negative. C. total benefits are increasing at a decreasing rate. D. marginal costs are upward sloping.
Real business cycle theory emphasizes the role of:
A. demand shocks as a cause of economic fluctuations. B. technology shocks as a cause of economic fluctuations. C. shocks to the money supply as a cause of economic fluctuations. D. government spending as a cause of economic fluctuations.