Moral hazard is a problem for the insurance industry
a. True
b. False
A
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Marginal benefit curves
A) have positive slopes. B) have negative slopes. C) are horizontal lines. D) are vertical lines. E) are upside-down U-shaped curves.
(In/Y) is quite ________ in the U.S. economy, and ________ stay away from its long-run average for several consecutive years
A) stable, yet it can B) stable, so it does not C) volatile, yet it can D) volatile, so it does not
Suppose that general business conditions improve, and at the same time, wealth increases. Based on this information, we know that:
A. the real interest rate increases. B. bond prices increase. C. yield to maturity decreases. D. the quantity of bonds increases.
If proceeds from loans are NOT deposited back in the banking system, then
A. the Fed intervenes by selling more Federal government bonds. B. the magnitude of the multiplier process is reduced. C. the magnitude of the multiplier process is increased. D. there is no effect on the magnitude of the multiplier process.