Refer to Figure 27-1. Suppose the economy is in short-run equilibrium above potential GDP and automatic stabilizers move the economy back to long-run equilibrium
Using the static AD-AS model in the figure above, this would be depicted as a movement from
A) D to C. B) C to B. C) A to E. D) B to A. E) E to A.
B
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In monopolistic competition, firms compete on product quality, price and marketing
Indicate whether the statement is true or false
Higher prices can discourage use/consumption, which in turn may better allocate scarce resources
a. True b. False Indicate whether the statement is true or false
Suppose there are two types of people: "good risks" who have 1 to 9 odds of falling ill, and "bad risks" who have a 1 to 3 odds of falling ill. If an insurance company cannot distinguish good risks from bad risks, what is the best way for it to deal with this problem?
a. Do not offer any insurance at 1 to 3 odds. b. Make everyone purchase insurance that offers 1 to 3 odds. c. Limit the amount of insurance that can be purchased at 1 to 9 odds. d. Provide policies that offer 1 to 9 odds and 1 to 3 odds, allowing each group to purchase the appropriate policy.
A decision by a government to sell businesses that currently are operated by the government to private investors is an example of ________ policy.
A. monetary B. aggregation C. structural D. fiscal