Moral hazard is best described as
a. an action by an individual that endangers others.
b. an action that puts one's salvation at risk.
c. the presence of insurance increasing risk taking behavior.
d. vigilance by individuals to keep total insurance claims at a minimum to keep rates low.
c
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Let C = 550 + 0.8y and I = 75. Assume no government or foreign sectors. If investment increases by 100, the equilibrium output increases by a total of
A) 60. B) 175. C) 500. D) 800.
An increase in the price of ice cream would cause a decrease in the demand for ice cream and an increase in the demand for frozen yogurt, a substitute
a. True b. False Indicate whether the statement is true or false
A steel company sells some steel to a bicycle company for $150 . The bicycle company uses the steel to produce a bicycle, which it sells for $250 . Taken together, these two transactions contribute
a. $150 to GDP. b. $250 to GDP. c. between $250 and $400 to GDP, depending on the profit earned by the bicycle company when it sold the bicycle. d. $400 to GDP.
Assume that M is $200 billion and V is 6. If V increases by 15%, what will be the change in nominal GDP?
What will be an ideal response?