Moral hazard:
A. is about the unobserved characteristics of people.
B. is about the unobserved actions of people.
C. occurs before the parties have entered into an agreement.
D. None of these statements is true.
B. is about the unobserved actions of people.
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Classical unemployment can be caused by which of the following?
A. Minimum wage laws B. Bargaining by unions C. Efficiency wages D. All these create classical unemployment.
If the demand for new automobiles falls when income falls, automobiles are said to be normal goods
a. True b. False
GDP excludes expenditures by:
a. Government on military hardware b. Business for travel and entertainment c. Consumers on used automobiles d. Businesses on pollution control equipment
If the reserve ratio decreases from 20 percent to 10 percent, then the potential money multiplier
A. decreases from 10 to 5. B. decreases from 20 to 10. C. increases from 5 to 10. D. does not change.