When insurance companies use observable information about people to reveal private information, it is called ______.
a. adverse selection
b. asymmetric information
c. screening
d. standardization
c. screening
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Which of the following statements is correct?
A. Both perfectly competitive and monopolistic firms are price makers. B. Both perfectly competitive and monopolistic firms are price takers. C. A perfectly competitive firm is a price taker, while a pure monopoly is a price maker. D. A perfectly competitive firm is a price maker, while a pure monopoly is a price taker.
Which of the following statements correctly defines the law of demand?
a. The lower the price of a commodity, the lower the quantity demanded of that commodity. b. As the price of a commodity increases, the quantity demanded of that commodity also increases. c. The lower the price of a commodity, the greater the quantity demanded of that commodity. d. The lower the price of a commodity, the greater the quantity supplied of that commodity. e. The quantity demanded of a particular good decreases with an increase in the price of a substitute good.
Assuming the economy is represented by the graph shown, if the government were to enact a partially successful expansionary fiscal policy, it would be most likely to:
A. move from equilibrium A to B.
B. move from equilibrium B to A.
C. cause unemployment to temporarily increase.
D. cause deflation.
Potential GDP would increase if
A. the rate of capital depreciation increased. B. the labor force decreased. C. the price level grew. D. the rate of capital growth increased.