From the standpoint of the economy as a whole, the role of insurance is not to eliminate the risks inherent in life. Then what is its purpose?
To spread these risks out more efficiently. It reduces an individual's burden of the risk.
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Of the following, which is NOT a monetary policy rule the Fed could follow?
A) an unemployment rate targeting rule B) an inflation targeting rule C) a money targeting rule D) a k-percent rule E) a nominal GDP targeting rule
John Maynard Keynes argued that if many households decide at the same time to increase saving and reduce spending
A) the economy will benefit in the short run and benefit by an even greater amount in the long run. B) this will have a major negative impact on the economy in both the short run and in the long run. C) this may benefit the economy in the long run, but could be counterproductive in the short run. D) this may benefit the economy in the short run, but not in the long run.
In the four-quadrant diagram of the specific factors model, the graph in the lower right quadrant is a country's
A) production function for cloth. B) production possibility frontier. C) labor allocation constraint. D) production function for food. E) labor supply curve.
In game theory, a Nash equilibrium is
a. an outcome in which each player is doing his best given the strategies chosen by the other players. b. an outcome in which no player wishes to change her chosen strategy given the strategies chosen by the other players. c. the outcome that occurs when all players have a dominant strategy. d. All of the above are correct.