Why do insurance companies in many developing countries not offer full health insurance coverage to older applicants?
What will be an ideal response?
Older applicants are more likely to fall ill than younger applicants. Therefore, if the insurers were to offer full insurance coverage to these customers, they will require a higher premium. If the premium is high, low-risk individuals are less likely to buy the insurance, leading to the problem of adverse selection.
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
According to Figure 2.5, the United States civilian unemployment rate in June 2013 was ________
A) 5.0% B) 22.1% C) 7.8% D) 8.5% E) none of the above
Which of the following is not a tool for controlling the money supply?
a. Buying government bonds b. Selling government bonds c. Changing tax rates d. Changing the required reserve ratio e. Changing the discount rate
Inequality between countries, in terms of differences in their average national incomes, has been:
A. increasing since the 1930s. B. decreasing over recent decades. C. decreasing since the 1930s. D. increasing over recent decades.