One difference between moral hazard and adverse selection is
a. Moral hazard has to do with unobservable characteristics of individuals
b. Adverse selection has to do with unobservable actions of individuals
c. Adverse selection is when individuals change their behaviors because of a contract
d. Adverse selection is when you choose the wrong answer on a test
b
You might also like to view...
In events leading to the housing bubble, investment banks on Wall Street made money through the housing market by:
A. buying as many loans as possible to create mortgage-backed securities. B. relying on banks to sell as few high-risk mortgages as possible. C. ensuring local banks were making good loans. D. offering low interest loans to those with very good credit.
What is the overall impact on an economy when import quotas are imposed?
a. Foreign competition is eliminated. b. Consumers and producers win. c. Consumers lose, and producers gain. d. Prices in the affected industry fall.
Refer to the information provided in Figure 4.4 below to answer the question(s) that follow.
Figure 4.4Refer to Figure 4.4. The price of oil in the United States would be $125 per barrel, and the United States would import 6 million barrels of oil per day if the United States levies ________ per barrel tariff on imported oil.
A. no B. a $25 C. a $50 D. a $100
The money supply is 2,000 of which 500 is currency held by the public. Bank reserves are 150. The existing reserve/deposit ratio equals:
A. 0.15 B. 0.20 C. 0.05 D. 0.10