In developed countries, the enforcement of contracts and the adjudication of contract disputes through the court system:
A. reduces the volume of international trade.
B. is an important way to reduce transaction costs.
C. lowers the comparative advantage enjoyed by producers.
D. weakens the system of property rights.
Answer: B
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Answer the following statement(s) true (T) or false (F)
1. Adverse selection can cause insurance companies to limit the amount of insurance they provide to people who are "poor risks." 2. Most economists believe adverse selection played no role in the 2008 financial crisis. 3. In the moral hazard problem, people incur additional risks as a result of being insured. 4. In the principal-agent problem, the principal is the person performing work and the agent is the one for whom the work is being done. 5. If employers had to pay higher than equilibrium wages to their workers, then workers would be better off but employers would be worse off.
The Second Bank of the United States lost its charter, in part, because Andrew Jackson effectively argued to the voting members of Congress that the "central" bank was a monopoly and largely influenced by the corrupt and fraudulent behavior of a
wealthy minority and foreign investors. Indicate whether the statement is true or false
Recall the Application about the productivity of large infrastructure investments to answer the following question(s). According to the Application, which infrastructure investment in the U.S. contributed to the increased the productivity of agricultural lands between 1870-1890?
A. railroads B. the internet C. the highway systems. D. dams.
At the natural rate of unemployment, the economy can be considered to be at full employment.
Answer the following statement true (T) or false (F)