If a life insurance company offers coverage regardless of age, health status, or smoking history, it is likely to suffer
A) moral hazard problems.
B) adverse selection problems.
C) lower costs.
D) low demand for its product.
B
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(Requires Appendix material) Which of the following statements is correct?
A) TSS = ESS + SSR B) ESS = SSR + TSS C) ESS > TSS D) R2 = 1 - (ESS/TSS)
If MPC = 2/3, a decrease in government purchases of $10 billion will ultimately lead to:
a. a $30 billion increase in aggregate demand. b. a $10 billion increase in aggregate demand. c. a $10 billion decrease in aggregate demand. d. a $30 billion decrease in aggregate demand.
To be binding, a price floor must be set above the equilibrium price
a. True b. False Indicate whether the statement is true or false
When the Fed engages in quantitative easing, it alters ______________________ and when the Fed makes open market purchases it alters _______________________
A) short-term interest rates; long-term interest rates B) long-term interest rates; short-term interest rates C) the required reserve ratio; income tax rates D) income tax rates; the required reserve ratio