Related to the Economics in Practice on page 359: The individual mandate feature of the Affordable Care Act potentially broadens the pool of people who are in the health insurance market. Including young, healthy people in this pool via the mandate should potentially reduce ________ and ________ overall health care costs.
A. asymmetric information; raise
B. asymmetric information; have no impact on
C. adverse selection; lower
D. adverse selection ; raise
Answer: C
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The quantity theory of money assumes that
a. the national economy tends to operate at less than full. b. the velocity of money is unstable. c. the national economy tends to operate at full employment. d. the velocity of money varies with changes in interest rates.
When a firm creates negative externalities by polluting, in order to achieve the socially efficient outcome: a. the firm's production should be prohibited
b. the firm's production should be increased and the price of its output should be decreased. c. the firm's production should be increased and the price of its output should be increased. d. the firm's production should be reduced and the price of its output should be increased.
If a commercial bank holds 25 percent of deposits as reserves, then the value of money multiplier will be equal to 4
a. True b. False Indicate whether the statement is true or false
The expenditure approach for the calculation of GDP includes spending on