Moral hazard occurs when the parties on once side of the market, who have information not known to others, self select in a way that adversely affects the parties on the other side of the market.
Answer the following statement true (T) or false (F)
False
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Bundle A is worse than bundle B, and bundle C is an average of bundles A and B. Then our usual assumptions about tastes imply that bundle B is at least as good as bundle C.
Answer the following statement true (T) or false (F)
Suppose that Dave has $200 to spend per week and he buys only magazines and pizza. The price of a pizza is $10 and the price of a magazine is $5. What is Dave's real income in terms of magazines?
A) 20 B) 40 C) 200 D) 10
If European incomes rose, European tariffs on U.S. goods decreased, or their tastes for American goods increased, Europeans would demand ____ U.S. goods, leading them to ____ their supply of euros to obtain the added dollars necessary to make those purchases. a. more; increase
b. more; decrease. c. fewer; increase. d. fewer; decrease.
Which of the following events would shift money demand to the right?
a. an increase in the interest rate or an increase in the price level b. an increase in the interest rate, but not an increase in the price level c. an increase in the price level, but not an increase in the interest rate d. neither an increase in the interest rate nor an increase in the price level