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 occurs when individuals least appropriate for positions are most likely to apply for them
d. Adverse selection is when you choose the wrong answer on a test
c
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What does the Law of Supply state? What is the key feature of a typical supply curve?
What will be an ideal response?
If the risk of buying U.S. assets rises because it is discovered that lending institutions had not carefully evaluated borrowers prior to lending them funds, then
a. the real exchange rate and the interest rate will rise. b. the real exchange rate will rise and the interest rate will fall. c. the real exchange rate will fall and the interest rate will rise. d. the real exchange rate and the interest rate will fall.
The goods and services purchased from foreign sources are:
A.) Investment. B.) Exports. C.) Imports. D.) Income transfers.
Firms gain control over price in monopolistic competition by
A. blocking entry of other firms into the industry. B. colluding with other firms to set prices. C. producing a product for which there are no close substitutes. D. differentiating their products.